Exploring Paragon 28, Inc. (FNA) Investor Profile: Who’s Buying and Why?

Are you wondering who was holding Paragon 28, Inc. (FNA) stock right before the Zimmer Biomet acquisition, and what their final thesis was? The story of Paragon 28's investor profile in 2025 is less about long-term growth and more about a calculated, near-term exit, and the numbers show it: institutional investors owned a commanding 63.57% of the company, with giants like Vanguard Group Inc. and BlackRock Inc. being among the top shareholders. The final payoff was concrete, with shareholders receiving an upfront cash payment of $13.00 per share, valuing the equity at approximately $1.1 billion, plus a Contingent Value Right (CVR) that could add up to $1.00 per share if the company's 2026 net sales hit the $361 million target. That CVR structure is the key, because it mapped the final investment decision directly to the company's pre-merger goal of achieving EBITDA positivity in 2025 and its TTM revenue of $0.25 Billion USD as of November 2025. Did those major holders like MVM Partners LLC, who held a massive position, exit perfectly, or is there still money to be made on the CVR? Honestly, it's all about the final revenue ramp now.

Who Invests in Paragon 28, Inc. (FNA) and Why?

The investment profile for Paragon 28, Inc. (FNA) in 2025 is a two-part story: a pre-acquisition growth thesis giving way to a definitive merger arbitrage play. The company was acquired by Zimmer Biomet on April 21, 2025, for a total value of approximately $1.39 billion, which fundamentally altered the motivations for its investor base.

Before the acquisition, investors were drawn to the company's strong growth trajectory in the specialized foot and ankle orthopedic market. Post-acquisition, the focus shifted entirely to the deal mechanics and the potential upside from the Contingent Value Right (CVR). This is a critical distinction for anyone looking at the 2025 fiscal year data. One clean one-liner: The 2025 investment story is a balance sheet check, not a P&L forecast.

Key Investor Types and Their 2025 Holdings

Institutional investors dominate the ownership structure of Paragon 28, Inc., holding roughly 63.57% of the stock. This high percentage is typical for a medical device company with a strong growth narrative and a relatively small market capitalization prior to the merger announcement. Retail investors, while present, make up the smaller, less concentrated portion of the shareholder base.

The institutional base is diverse, but the largest shareholders as of early 2025 were primarily passive index funds and large-scale asset managers, plus a significant presence from hedge funds and private equity-style investors who had backed the company before its Initial Public Offering (IPO).

• Passive Institutional Funds: Vanguard Group Inc. was a top holder, with a position of 2,809,109 shares in early 2025, primarily through index funds like the Vanguard Total Stock Market Index Fund. They are buying the market, not a specific thesis.
• Active Asset Managers: Firms like Geode Capital Management LLC and JPMorgan Chase & Co. held sizable positions, signaling confidence in the company's long-term market penetration.
• Hedge Funds & Arbitrageurs: Post-January 2025, funds specializing in merger arbitrage piled in. Their goal was to capture the small, low-risk spread between the trading price and the cash offer of $13.00 per share.

Investment Motivations: Growth and the CVR Upside

The motivation for holding Paragon 28, Inc. stock in 2025 boiled down to two distinct phases: the growth story and the merger premium. The company's focus on the niche foot and ankle market, with a portfolio of nearly 80 product systems, was the initial draw.

The financial metrics that drove the pre-acquisition valuation were compelling. Paragon 28, Inc. reported 2024 full-year revenue of approximately $256.18 million, representing a strong year-over-year growth of 18.39%. Management had also targeted achieving EBITDA positivity by 2025, a key milestone for a former high-growth, unprofitable company. Honestly, that growth profile is what made it an attractive takeover target for a giant like Zimmer Biomet.

The merger terms introduced a unique incentive: the Contingent Value Right (CVR). This is a non-transferable right that pays out up to an additional $1.00 per share, tied to Paragon 28's net revenue performance in 2026. Here's the quick math: the full CVR payout requires the acquired business to hit a net revenue target of $361 million in 2026. This means investors were betting that the company's historical growth rate, which was 18.3% in 2024, would continue under Zimmer Biomet's ownership, giving them a potential total payout of $14.00 per share.

Investment Strategies in a Merger Year

In 2025, you see two dominant strategies at play, which is defintely common when a publicly traded company is acquired:

The first strategy, common among long-term holders and venture capital backers, was a simple long-term holding for the acquisition. These investors, who believed in the company's mission to redefine the foot and ankle market (you can read more about their history and mission Paragon 28, Inc. (FNA): History, Ownership, Mission, How It Works & Makes Money), simply held their shares to receive the cash and CVR. Their return was locked in by the $13.00 cash price, plus the CVR's potential upside.

The second, and more active, strategy was merger arbitrage. This is a short-term trading strategy where investors buy the stock after the deal is announced, aiming to profit from the small price difference (the spread) between the current market price and the final cash offer. For Paragon 28, Inc., this strategy was focused on the certainty of the cash component and the probability of the CVR payout, which was considered achievable given the company's pre-merger growth rate. The risk here was regulatory approval or a deal falling through, but with the merger closing in April 2025, that risk quickly evaporated.

Institutional Ownership and Major Shareholders of Paragon 28, Inc. (FNA)

The investor profile for Paragon 28, Inc. (FNA) is defintely a unique case for the 2025 fiscal year because the company was acquired by Zimmer Biomet Holdings, Inc. on April 21, 2025. Your question of 'who's buying and why' pivots from long-term growth investing to high-stakes merger arbitrage (the simultaneous buying and selling of stock in two merging companies to profit from a price difference).

The final institutional ownership landscape was defined by this deal, which saw shareholders receive $13.00 per share in cash, plus a non-tradeable Contingent Value Right (CVR) of up to $1.00 per share. The total transaction was valued at approximately $1.2 billion. Analyzing the last public filings before the delisting shows which institutional players positioned themselves for the cash payout.

Top Institutional Investors Before the Acquisition

In the lead-up to the April 2025 acquisition, the largest institutional holders were a mix of index funds and active managers, but the most aggressive positions were taken by firms specializing in event-driven strategies. These investors bought in to capture the difference between the trading price and the $13.00 cash offer. Here's a snapshot of some of the largest positions reported in the first half of 2025:

• TIG Advisors LLC: Held the largest reported stake at 2,556,451 shares, valued at approximately $33.39 million.
• Millennium Management LLC: A significant player, holding 1,115,290 shares with a market value of about $14.57 million.
• Jane Street Group LLC: Held 904,938 shares, valued at $11.82 million, reflecting a massive bet on the deal closing.
• Pentwater Capital Management LP: Held 900,000 shares, valued at $11.75 million, another clear arbitrage-focused position.

These firms were buying the stock to ensure they owned the shares when the merger closed, guaranteeing the $13.00 cash payment. It's a low-risk, low-return strategy when a deal is this close to completion.

Dramatic Changes in Ownership: The Arbitrage Play

The most telling aspect of Paragon 28, Inc.'s 2025 investor profile was the extreme volatility in ownership changes. Once the merger agreement was announced on January 29, 2025, the stock became a classic merger arbitrage target. You see this in the massive percentage increases in holdings from firms known for this strategy.

Here's the quick math: If a stock is trading at $12.50 and the cash offer is $13.00, an arbitrageur buys the stock, waits for the merger to close, and pockets the $0.50 difference per share. That's a great annualized return for a few months of holding time.

Key ownership changes reported in the first half of 2025 include:

The massive buying by firms like Jane Street and Millennium was a vote of confidence that the Zimmer Biomet deal would close. Conversely, the sharp reduction by a long-term holder like First Light Asset Management LLC suggests they were taking their profits and exiting the stock, as their investment thesis had been realized through the acquisition.

The Impact of Institutional Investors on Strategy and Stock Price

In this scenario, the role of institutional investors was less about influencing long-term corporate strategy-like product development or market expansion-and entirely about the near-term transaction. Their primary influence was on the stock price and the merger's approval.

The stock price essentially became a function of the acquisition price. Once the $13.00 cash offer was announced, the share price traded in a tight band just below that value until the April 21, 2025, closing date. This tight trading range is a direct result of arbitrageurs buying up shares until the price was close to the deal value, effectively removing any major downward risk.

Furthermore, the institutional holders were critical in the shareholder vote on April 17, 2025, which formally approved the merger. Their collective stake ensured the deal's success, transforming Paragon 28, Inc. into a wholly owned subsidiary of Zimmer Biomet. This is the ultimate impact: a strategic decision to sell the company, driven by a compelling valuation that institutional shareholders supported. If you want to understand the long-term vision that made the company an attractive target, you can review its Mission Statement, Vision, & Core Values of Paragon 28, Inc. (FNA).

The takeaway is simple: For Paragon 28, Inc. in 2025, institutional investors acted as transaction facilitators, not strategic partners. Their actions locked in the $13.00 cash price for all shareholders.

Key Investors and Their Impact on Paragon 28, Inc. (FNA)

The investor profile for Paragon 28, Inc. (FNA) fundamentally changed in the first half of 2025, shifting from a mix of growth-focused institutional funds to a concentration of merger arbitrageurs. The direct takeaway is that the stock is no longer publicly traded as an independent entity, having been acquired by Zimmer Biomet Holdings, Inc. (ZBH) on April 21, 2025, for an enterprise value of approximately $1.2 billion.

This acquisition, which offered shareholders $13.00 per share in cash plus a Contingent Value Right (CVR) of up to $1.00 per share, dictated who was buying and selling in the months leading up to the closing. The new investor base was focused on capturing the small spread between the stock price and the deal value, plus the potential CVR payout.

The Rise of Arbitrage Funds in 2025

In the lead-up to the final merger in April 2025, the most notable buyers were large hedge funds specializing in merger arbitrage (betting on a deal closing). These funds bought massive stakes to lock in the small, almost guaranteed profit. You saw significant, rapid accumulation during the first half of the 2025 fiscal year.

• TIG Advisors LLC: Held the largest stake among the notable arbitrage players, reporting 2,556,451 shares as of May 15, 2025, valued at over $33.39 million.
• Millennium Management LLC: Increased its position by a staggering +220.2% in the quarter ending May 16, 2025, holding 1,115,290 shares.
• Jane Street Group LLC: Executed an even more aggressive move, boosting its stake by over +1,109.8% to 904,938 shares by May 19, 2025.

Here's the quick math: buying shares slightly below the $13.00 cash offer price meant a low-risk return, plus the free optionality of the CVR. This is why you saw such a huge influx of institutional capital. Conversely, a former major holder, First Light Asset Management LLC, sold off a huge portion of its stake, reducing its holding by -95.3% in a clear exit move.

Investor Influence: From Stock Price to CVR Execution

Before the acquisition, institutional investors influenced the stock price through their buying and selling, but their ultimate influence was on the merger vote. Once the deal closed, their influence shifted entirely. The stock is gone, but the CVR remains for those who held shares at closing.

The CVR entitles holders to up to an additional $1.00 per share, contingent on the acquired Paragon 28 business hitting a net revenue target of $361 million in Zimmer Biomet's fiscal year 2026. This is a significant jump from Paragon 28's 2024 net revenue of $256.18 million.

The most influential person now is an insider: Albert DaCosta, Paragon 28's co-founder and former Chairman, who owned 14% of the company's shares. He transitioned to become the new Global President of Zimmer Biomet's Foot and Ankle division. He has a massive incentive-both as a former major shareholder and the new division head-to ensure the business grows fast enough to hit that CVR milestone. That's real, direct influence on the outcome.

For a deeper dive into the company's financial trajectory leading up to this point, you should read Breaking Down Paragon 28, Inc. (FNA) Financial Health: Key Insights for Investors.

CVR Payout Thresholds and Growth Reality

The CVR structure provides a clear, measurable goal that now drives the investment thesis for former shareholders who retained the CVR. To get the full $1.00 payout, the business needs to achieve a compound annual growth rate (CAGR) of roughly 19% over two years from its 2024 revenue. This is defintely achievable, but not guaranteed.

The payout is linear between $346 million (the floor for any payout) and $361 million (the ceiling for the full $1.00). Any CVR investor is now betting on Zimmer Biomet's ability to integrate the Paragon 28 product portfolio and leverage its cross-selling opportunities to maintain the historical growth momentum.

The action for CVR holders is simple: monitor Zimmer Biomet's commentary on the Foot and Ankle division's sales performance. That's the only metric that matters now.

Market Impact and Investor Sentiment

You're looking at Paragon 28, Inc. (FNA) in November 2025, but the first thing you need to know is that the traditional investor profile is closed. The company was acquired by Zimmer Biomet Holdings, Inc. on April 21, 2025, making it a wholly owned subsidiary. So, the sentiment we're tracking isn't about the stock's future performance, but the market's final take on the exit valuation and the contingent value right (CVR).

Overall investor sentiment was a qualified positive-they secured a clean exit at $13.00 per share in cash, plus the potential for more. The market capitalization at the time of the deal was approximately $1.1 billion, with an enterprise value of about $1.2 billion. That's a solid return for many, especially considering the company was still forecasting a net loss for the year.

• Exit was clear: $13.00 cash per share.
• CVR adds up to $1.00 per share more.
• Final market value was $1.1 billion.

Recent Market Reactions: The Acquisition Arbitrage

The stock market's response was exactly what you'd expect after a definitive merger agreement was announced on January 29, 2025. The share price immediately traded up to the offer price of $13.00, effectively capping the upside and removing any normal trading volatility. This is classic merger arbitrage-investors buy the stock near the offer price to capture the small spread, betting on the deal closing. You defintely saw a flurry of institutional activity in the run-up to the April close, which wasn't about long-term conviction but short-term profit.

Here's the quick math on some institutional moves reported in the second quarter of 2025, which shows this arbitrage play in action:

These large, quick increases in holdings, like the +1,109.8% change for Jane Street Group LLC, were mostly arbitrageurs stepping in to lock in the small, nearly risk-free profit between the market price and the $13.00 cash offer. Once the deal closed, the stock was delisted, and the trading activity ceased.

Analyst Perspectives: The CVR and Future Growth

The analyst community's perspective shifted from long-term growth potential to a transactional view immediately following the acquisition announcement. Prior to the deal, the consensus rating was a 'Hold' from six analysts, with an average price target of $14.50 as of January 30, 2025. Following the news, several firms downgraded the stock to 'Hold' or 'Equal-Weight,' essentially acknowledging the price ceiling set by the acquisition.

The key point of discussion became the Contingent Value Right (CVR), which offers up to an extra $1.00 per share if Paragon 28, Inc. hits specific revenue milestones under Zimmer Biomet in fiscal year 2026. The revenue target for a full CVR payout is between $346 million and $361 million. Analysts were cautious because hitting that target isn't guaranteed, and the inclusion of the CVR itself suggests some uncertainty about the near-term growth trajectory and profitability.

For the 2025 fiscal year, analysts had forecasted Paragon 28, Inc. to generate $294.31 million in revenue, an increase of 14.88% over the prior year, but still projecting an Earnings Per Share (EPS) of -$0.47. This mix of strong top-line growth and continued unprofitability is exactly why a larger player like Zimmer Biomet saw an opportunity to integrate the niche foot and ankle leader. You can find more detail on the company's strategic fit in the Mission Statement, Vision, & Core Values of Paragon 28, Inc. (FNA).