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J. C. Penney Company, Inc. Message Board

  • flyrican9 flyrican9 Jan 19, 2014 1:51 PM Flag

    institutional ownership 108 %???????

    How is that possible? Do they own shares that are shorted??

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    • You could either go with a bullsiht answer or the real one .

      A company I recently looked up showed institutional holdings of more than 100%. How is this possible?

      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.

    • Suppose 100 shares of stock are issued and purchased by Company A. Company A then makes that stock available to borrow. The stock is borrowed, sold and purchased by Company B. Together, A and B now own 200% of the amount of stock issued.

 
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