A:

It is obviously not technically possible for any shareholder or category of shareholder to hold more than 100% of a company's outstanding shares. Therefore, when you see investment information websites reporting institutional holdings exceeding the 100% mark, something is wrong with the data. There are two likely sources that are responsible for the reporting errors.

First, the figures in an institution's report correspond to an "institutional holdings date". These can differ somewhat among the various institutions holding a company's stock, resulting in differences that could impact the reported percentage for institutional holdings. The data presented is updated monthly with an approximate lag of four weeks. As a result, even a slight imprecision in the reporting dates among one or more institutions could throw off the count.

Second, we checked with Ownership Analyzer, which provides data on institutional investors' holdings. Here's our summary of their take on the most likely cause of distorted institutional holdings percentages:

Let's say that XYZ Company has 20 million shares outstanding and Institution A owns all 20 million. In a shorting transaction, Institution B borrows 5 million of these shares from Institution A and sells them to Institution C. If both A and C claim ownership of the shares shorted by B, the institutional ownership of XYZ could be reported as 25 million shares (20 + 5), or 125% (25/20).

In cases where reported institutional ownership exceeds 100%, actual institutional ownership would have to be very high. While somewhat imprecise, this conclusion helps investors determine the degree of the impact that institutional purchases and sales could have on a company's stock.

For more insight, read Institutional Investors And Fundamentals: What's The Link?

RELATED FAQS
  1. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  2. What are some examples of a Foreign Institutional Investor (FII)?

    Discover some examples of foreign institutional investors, and learn information about the nature of foreign institutional ... Read Answer >>
  3. How do I become a CFA charterholder?

    The CFA Institute requires individuals to satisfy a number of steps to become CFA charterholders.The most widely known requirement ... Read Answer >>
  4. Why do share prices fall after a company has a secondary offering?

    The best way to answer this question is to provide a simple illustration of what happens when a company increases the number ... Read Answer >>
  5. How do I go about opening up a Roth IRA?

    You may open Roth IRAs at most financial institutions, such as your local bank, your credit union, or brokerage firm. You ... Read Answer >>
Related Articles
  1. Investing

    iShares Silver Trust ETF: Who Is Invested? (SLV)

    Discover the top institutional owners of the iShares Silver Trust exchange-traded fund (ETF), their exact ownership and their recent position adjustments.
  2. Investing

    The Pros And Cons Of Institutional Ownership

    These big players can both create and destroy value for shareholders.
  3. Insights

    Institutional Investors

    Learn more about the advantages that financial institutions enjoy when buying and selling securities.
  4. Investing

    Pitfalls Of Copycat Investing

    While it may sound good in theory to attempt to mimic the investment style and profile of a successful institution, it is often much harder (if not impossible) to do so in practice.
  5. Investing

    Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  6. Personal Finance

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  7. Investing

    Are the Pros Buying? Is it Important?

    Institutional investment numbers are not always indicative of a stock’s profit potential.
  8. Investing

    (FAS) Direxion Daily Financial Bull 3x ETF: Who is Invested?

    Discover the largest institutional holders of the Direxion Daily Financial Bull 3X Shares ETF, and learn how their trade activity can affect performance.
  9. Small Business

    How Equity Capital Markets Work

    An equity capital market is a market existing between companies and financial institutions that raises money for the companies.
  10. Personal Finance

    What is the Cost of Funds?

    Cost of funds is the interest cost financial institutions pay to use the funds they deploy in their business.
RELATED TERMS
  1. Assuming Institution

    A healthy financial institution that purchases the assets of ...
  2. Institutional Ownership

    The amount of a company’s available stock owned by mutual or ...
  3. Investor Shares

    Mutual fund shares purchased by individual investors as opposed ...
  4. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  5. Depository

    On the simplest level, depository is used to refer to any place ...
  6. Institute Of Petroleum - IP

    The Institute of Petroleum (IP), based in the United Kingdom, ...
Hot Definitions
  1. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  2. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  3. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  6. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
Trading Center