Is it allowed for nonprofit entities ) to own large stakes in public?
Yes. A 501(c)(3) organization is allowed to own large stakes in public for-profits, particularly if the organization is classified as a public charity. The caveat is that some public charities are classified as such based on percentage tests of income from public sources vs income from private and investment sources, and owning a large stake could potentially throw off the math. A private foundation's holdings may be subject to excess business holdings tax. The excess business holdings tax is a punitive tax that makes it impossible to excessively hold, directly or indirectly, certain percentage stakes in a for-profit company. However, even then, there are exceptions to the rule.