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Hoots : Why can the institutional ownership of shares be larger than 100%? Why it's larger than 100%? What is the meaning of this number? Thanks, - freshhoot.com

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Why can the institutional ownership of shares be larger than 100%?
Why it's larger than 100%? What is the meaning of this number?

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This can occur due to discrepancies in institutional reporting.

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)

Regardless, a reported institutional owernship percentage of above 100 is very likely to have a extremely high rate of actual institutional ownership.

Source: Investopedia


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