Strong Institutional Ownership and Top Shareholders of LegalZoom.com, Inc. (NASDAQ:LZ)

LegalZoom.com has 54% institutional ownership, with top 6 shareholders owning 50% of the company. Institutional ownership implies that the stock price is sensitive to their trading actions and can be a vote of confidence on the company's future. However, institutional investors can also make bad investments, and their actions can cause the share price to drop.

LegalZoom.com, Inc. [LZ], a provider of legal and business services, has seen significant changes in its institutional ownership. According to the latest SEC Form 4 filing, the company's institutional ownership stands at 54%, with the top six shareholders collectively owning 50% of the company [1]. This high level of institutional ownership indicates that the stock price is sensitive to the trading actions of these major investors.

Institutional ownership can serve as a vote of confidence in a company's future prospects. When large institutions invest in a company, it often signals that they believe in the company's long-term growth and potential. However, institutional investors can also make poor investment decisions, which can negatively impact the share price.

One recent transaction at LegalZoom.com is particularly notable. On July 9, 2025, Nicole Miller, a director and 10% owner of the company, reported a transaction where shares of the company's common stock were automatically withheld upon the vesting of restricted stock units. This transaction was executed to satisfy Miller's tax withholding obligations [1].

In the broader context of the stock market, Rani Therapeutics Holdings Inc. [RANI], a clinical-stage biotherapeutics company, saw its stock plunge 35.8% after announcing a registered direct offering. The offering, which will raise approximately $3 million in gross proceeds, includes the sale of 4,354,000 shares of Class A common stock at $0.40 per share and pre-funded warrants to purchase an additional 3,146,000 shares at $0.3999 per share [2]. The significant discount to the recent trading price appears to be the primary driver of the sharp sell-off in the stock.

These events highlight the importance of institutional ownership and the impact of major transactions on stock prices. While institutional ownership can provide a positive signal about a company's future, it also underscores the potential risks associated with large-scale trading actions. Investors should closely monitor these developments to make informed decisions about their portfolios.

References:
[1] https://www.stocktitan.net/sec-filings/LZ/form-4-legal-zoom-com-inc-insider-trading-activity-eaf4e8aa1f49.html
[2] https://www.investing.com/news/stock-market-news/rani-therapeutics-stock-plunges-after-3-million-registered-direct-offering-93CH-4136228