Principal Shareholder

AAA

DEFINITION of 'Principal Shareholder'

The main owner of a publicly traded investment, also known as the majority shareholder. The principal shareholder is the entity that owns the greatest percentage of a company's shares and therefore has the largest stake in the company's success. Smaller investors often look to the behavior of the principal shareholder as an indication of the company's performance. If the principal shareholder makes a large additional investment in the company, for example, this is probably an indication that the company is performing well.

INVESTOPEDIA EXPLAINS 'Principal Shareholder'

In some cases, the company's principal shareholder is also its CEO, president or founder. This is common due to the fact that often the individual or family which founded the company typically insists on maintaining majority control over the company's shares, allowing them, the primary shareholders to dictate to a large degree the direction of the business.

RELATED TERMS
  1. Shareholder

    Any person, company or other institution that owns at least one ...
  2. Non-Controlling Interest

    An ownership stake in a corporation where the held position gives ...
  3. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding ...
  4. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
  5. Shareholder Activist

    A person who attempts to use his or her rights as a shareholder ...
  6. Controlling Interest

    When one shareholder or a group acting in kind holds a high enough ...
Related Articles
  1. A Primer On Preferred Stocks
    Bonds & Fixed Income

    A Primer On Preferred Stocks

  2. Why Do Companies Care About Their Stock ...
    Investing Basics

    Why Do Companies Care About Their Stock ...

  3. Evaluating A Company's Management
    Active Trading Fundamentals

    Evaluating A Company's Management

  4. Proxy Voting Gives Fund Shareholders ...
    Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center