GME counterfeit shares?

External question — Personal Finance Stack Exchange Author: Lawnmower Man Original post: https://money.stackexchange.com/questions/135829 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. There's an article which claims that short sellers + brokers + DTCC sometimes manufactures counterfeit shares through legal and less-than-legal means to attack vulnerable companies and profit from their demise. Some redditors have claimed that GME may have more shares outstanding than it should, and thus that there exist counterfeit shares. I tried to research this claim and found some suspicious numbers which I hope that more knowledgeable folks can explain. According to its balance sheet, as of beginning of last year, GME had issued 64.3 million shares . According to Yahoo Finance, it currently has 69 million shares outstanding. Insiders hold 27.33% of all shares Institutional investors hold 122% 163% of all shares I understand that the SEC allows market makers/clearing houses to maintain naked shorts which temporarily inflate the number of shares outstanding, but 5 million? Really? That's almost 10% of the total shares! And how is it that insiders + institutions hold nearly 190% of all shares? This is the part that really stood out to me. When I look at the comparable values for, say, AMZN, everything adds up as I would expect.

External answer — Personal Finance Stack Exchange Author: William Walker III Original post: https://money.stackexchange.com/a/163974 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The SEC does not 'allow' naked shorting, but as with other forms of crime, it still occurs anyway. There are numerous erroneous assumptions in your question. First, Regulation SHO does not allow naked short selling as of 2008. It is an illegal practice and you will face penalties if you attempt it. As the Gamestop case illustrates , however, it still happens anyway - just as other forms of fraud and theft still occur. The SEC did not 'allow' this, per se. But rather, people were trading agreements to hand over shares, rather than actual shares - but the buyers were recording these as long positions, resulting in the share imbalance. If you were shocked at 10% of shares, the situation deteriorated to the point where one observer estimates the naked shorts were 40% of shares.

GME counterfeit shares?

GME counterfeit shares?

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