A few months ago we talked about a weird legal dispute over the Dole Food Co. buyout. Dole's chief executive officer, David Murdock, had taken it private for $13.50 a share in 2013, but shareholders thought it was worth more. So they sued, and won, and Murdock was ordered to pay shareholders an extra $2.74 a share plus interest, and shareholders were told to submit claims for their money.
But there was a problem: People submitted more claims than there were shares. This turned out not to be fraud, or carelessness: People really owned more shares than there were shares! It's just that other people owned negative shares. In rough numbers, there were 37 million shares outstanding, and people owned 49 million shares, but other people were short 12 million shares. The way short selling works is that X borrows a share from Y and sells it to Z. So Y owns one share, and Z owns one share, and X owes one share, and everything balances out and there's only one share outstanding. So the millions of extra shares made complete sense.