Often used in risk arbitrage. Corporations' or governments' equity share ownership in another corporation's shares.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The situation in which one publicly-traded company owns stock in another publicly-traded company. This situation can lead to double-counting of securities, especially when the two corporations are listed on the same index. Thus, one needs to account for cross holdings when aggregating the capitalizations of firms. If two firms cross hold each other, it is difficult to displace the management in one without the consent of the other corporation.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved