The New Stockholder: King Kong with a Quotron

Abstract

This chapter focuses on institutional stockholders, and reveals that the traditional stockholder has been substantially displaced by institutional stockholders, the massive growth of whom has occurred mostly over the past two decades. Mushrooming through the 1980s and 1990s, institutional stock ownership now accounts for 58 percent of all equity of the top 1,000 American corporations. Some corporations have most of their stock held by institutions—85 percent in the case of Coca-Cola. Institutional ownership in the largest 50 companies was 58.2 percent in the third quarter of 1999, with 62.7 percent of Home Depot, 64.4 percent of MCI Worldcom, 61.5 percent of Cisco Systems, and 63 percent of Citigroup controlled by institutional investors. The chapter reveals that institutional ownership was as high as 62.5 percent for the top 101–250 companies.