Who typically owns the majority of common stock in a corporation?

The majority of common stock in a corporation is typically owned by institutional investors, such as mutual funds and pension funds. This ownership structure is prevalent because institutional investors manage large pools of capital and are able to acquire significant amounts of stock in various companies. They invest on behalf of many clients, which amplifies their capacity to influence corporate governance and decisions through their voting power.

Institutional investors often conduct thorough analysis and due diligence, allowing them to make informed investment choices. Their expertise and resources promote stability and can lead to improved company performance, as institutional investors have a vested interest in the long-term success of the corporations they invest in.

While individual investors, government agencies, and foreign investors may also own shares in corporations, they generally do not represent the majority ownership. Individual investors often hold smaller amounts of stock compared to institutional players, and while government and foreign investments can be substantial, they typically do not dominate ownership stakes compared to the significant shareholding of institutional investors. This concentration of ownership can impact company policy and strategy, further emphasizing the influence that institutional investors have in the stock market.