Post by anderson on May 16, 2016 20:25:26 GMT -5
As someone noted above, some individuals maintain brokerage accounts with Goldman and, while all investment decisions are taken by the individuals. if the securities are held in street name Goldman must report the holding as their own. Similarly, Goldman manages pension funds for some corporations and maintains index funds for investors. So long as MNKD is part of any of the indicies, then Goldman must hold the number of shares that corresponds to MNKD's relative value (i.e. if there is a NASDAQ fund where MNKD is 0.05% of the total NASDAQ capitalization, then every NASDAQ index fund will hold 0.05% of their assets in MNKD stock). Most of what you see as institutional ownership is driven by index funds where the fund manager is just mimicking the asset allocations seen in the market. A computer decides on all the trades following an algorithm with no human input whatsoever.
There are of course strategic investment funds where somebody with deep expertise in the field makes conscious decisions to invest. Actively managed biotech funds will often employ physicians and PhD scientists to dig into the technology and market dynamics (much like a venture capital firm), and those investments might be indicative of where the "smart money" is headed. However, to understand that dynamic you need to learn the investment criteria, track record, and professional staffing of each fund and that is a huge task. Suffice it to say that any of the major funds (Goldman, Fidelity (FMR), Blackstone, State Street, etc.) are all a very mixed bag of investment vehicles with very different strategies and investors. It is worse than comparing apples and oranges; it is more like comparing apples to a fruit cocktail.
Also keep in mind that 13F filings look backwards; they are a snapshot of the holdings on the last day of the quarter and the reports are not due until 45 days after quarter end. Until this last batch of 13F filings, the institutional ownership numbers were those of December 31. So depending on the calendar the reports are always out of date by least 6 weeks and can be as much as 19 weeks old; that is a long time in a fast moving biotech market. You don't drive your car down the highway looking into the rearview mirror and you shouldn't take investment cues from stale institutional data either.
I believe the sentence in bold type above is correct in reporting of shareholder list and what the 13F is there to correct. They would not be able to count those shares on the 13F. From what I read you have to have "investment discretion", ie control over buying and selling. So if you have a totally managed account where in the above example a Goldman investment adviser buys and sells without having to consult with you they would be counted.
Also this straight form the form13f.pdf
"The purpose of Form 13F is to provide a reporting and disclosure system to collect specific information and to disseminate such information to the public about the holdings of institutional investment managers who exercise investment discretion over certain accounts of equity securities described in Section 13(d)(1) of the Exchange Act [15 U.S.C. 78m(d)(1)] (generally, certain U.S. exchange-traded equity securities, as set forth in rule 13f-1(c)) having, in the aggregate, a fair market value of atleast$100,000,000. We believe that investors will find Form 13F report information useful in tracking institutional investorholdings in their investments and that issuers, too, will find detail as to institutional investor holdings useful because much of their shareholder list may reflect holdings in “street name” rather than beneficial ownership. We believe that mandatory electronic dissemination of this data will help ensure timely and efficient dissemination of this important information. We believe that these reports should have the same degree of availability as other filings with the Commission, and that electronic filing will speed their dissemination in accordance with the intent of Congress."
And yes that is a direct cut an paste, so the sec need spell check since "atleast" and "investorholdings" need spaces.