Trump or Clinton? Uncertainty could shock economy, forecaster says

The Wall Street Journal reports:

In the stock market, more ownership seems to be concentrated in fewer hands all the time.

That’s been a worry for at least a century, since Louis Brandeis wrote his book “Other People’s Money.” But today’s financial technology has created an improbable scenario under which companies could use that concentration to put their investors in the dark.

Lumber Liquidators Holdings, the hardwood-floor retailer, has 27 million shares outstanding (total market value: $388 million), but only eight so-called shareholders of record. According to S&P Dow Jones Indices, more than one-fifth of the 1,500 largest companies in the U.S. have fewer than 300 official shareholders. Eight companies with market values of at least $1 billion each report having no more than 10 shareholders of record.

Such are the marvels of modern markets.

Your grandparents, perhaps even your parents, kept a sheaf of stock certificates in a safe-deposit box at the local bank as proof that they owned a certain number of shares in specific companies.

Grandma and Grandpa automatically got certificates, and their names were individually recorded on the companies’ ownership books.

But nowadays you automatically buy shares in electronic, not physical, form. Unless you ask your broker for a certificate to prove your ownership when you buy the shares, you won’t register on a company’s list of shareholders of record. Since brokers may charge $500 and up to issue a stock certificate, you’d be nuts to request one — and almost no one does anymore.

As a result, under Securities and Exchange Commission rules that conform to a 1934 federal law, companies don’t have to count every Joe and Jane Investor as a shareholder.

How many "real" shareholders exist at a publicly held company? Good question.