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 do states do with unclaimed property?

    Unclaimed property refers to personal accounts in financial institutions or companies that have had no activity and whose ... Read Full Answer >>
  2. How do financial advisors execute trades?

    Today, almost every investor invests through online brokerage accounts. Investors often believe that their trades are directly ... Read Full Answer >>
  3. What are ComputerShare's escheatment services?

    Escheatment is the process by which ownership of abandoned property is transferred to the state. Escheated property can include ... Read Full Answer >>
  4. How does escheatment affect a company's shareholders?

    Escheated property in the United States is a designation for personal property such as bank accounts, shares, insurance proceeds, ... Read Full Answer >>
  5. How do modern companies assess business risk?

    Before a business can assess or mitigate business risk, it must first identify probable or likely risks to its bottom line. ... Read Full Answer >>
  6. Why has emphasis on corporate governance grown in the 21st century?

    Corporate governance refers to operational practices, management protocols, and other governing rules or principles by which ... Read Full Answer >>
Related Articles
  1. Stock Analysis

    Forest Laboratories: An Activist Investment Analysis

    Find out how patience and perseverance paid off big-time for billionaire activist Carl Icahn during his four-year fight with Forest Laboratories.
  2. Stock Analysis

    Tribune Media: An Activist Investment Analysis (TRCO)

    Learn more about the breakup of Tribune Company, once a powerful newspaper and broadcasting giant, and the role of activist investor Cliff Robbins.
  3. Stock Analysis

    PepsiCo: An Activist Investment Analysis (PEP)

    Read about the nearly two-year public feud between activist investor Nelson Peltz, head of Trian Fund Management, and iconic soft drink maker PepsiCo.
  4. Stock Analysis

    Hologic: An Activist Investment Analysis (HOLX)

    Read about a health care company that attracted activist investors Carl Icahn, Barry Rosenstein and Ralph Whitworth at the same time.
  5. Stock Analysis

    Air Products and Chemicals: An Activist Investment Analysis (APD)

    Learn about the productive, and uncommonly friendly, activist investment made by Bill Ackman into Air Products and Chemicals.
  6. Economics

    Why Enron Collapsed

    Enron’s collapse is a classic example of greed gone wrong.
  7. Stock Analysis

    4 Executives Who May Be On Thin Ice in 2016 (CMG,TWTR)

    Find out the reasons why these executives of underperforming companies may find themselves on the chopping block in the coming year.
  8. Stock Analysis

    Fortune Brands Home & Security: An Activist Investment Analysis (FBHS)

    Read about Bill Ackman's highly successful breakup of longtime holding company Fortune Brands in one of the most profitable examples of Wall Street activism.
  9. Stock Analysis

    Clorox: An Activist Investment Analysis (CLX)

    Read about the high-profile battle between The Clorox Company and billionaire activist investor Carl Icahn, who had three offers repelled by the Clorox board.
  10. Stock Analysis

    McGraw Hill Financial: An Activist Investment Analysis (MHFI, MHE)

    Learn about the high-profile split between McGraw Hill Financial and McGraw Hill Education, and how a few activist investors changed the corporate landscape.
RELATED TERMS
  1. Corporate Accountability

    The performance of a publicly traded company in non-financial ...
  2. Share Repurchase

    A program by which a company buys back its own shares from the ...
  3. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  4. Issued Shares

    The number of authorized shares that is sold to and held by the ...
  5. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  6. Corporate Culture

    The beliefs and behaviors that determine how a company's employees ...
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center