Cross Holding
Categories: Accounting, Metrics, Company Valuation
Cross holding describes the situation where one publicly-held company owns stock in another publicly-held company.
So if you're trying to determine what the two companies are really worth, you need to make sure you're not double-counting the number of securities each one holds.
Also, if pesky shareholders or a board of directors decides they want to boot out the CEO, for example, cross holdings make it a lot harder to get rid of 'em. They would need to get the agreement of the other company if they own a lot of stock in each other.