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Is it possible for a single share of stock to be shorted multiple times?

Concrete example:

Imagine we have five people with the following motivations:

Person A owns a share of company ABC and wants to lend it out to collect interest.  
Person B wants to short one share of company ABC.  
Person C wants to own one share of company ABC and lend it out to collect interest.  
Person D wants to short one share of company ABC.  
Person E wants to own one share of company ABC.

The following then occurs (in order):

Person A lends their share to Person B  
Person B sells their share to Person C  
Person C lends their share to Person D  
Person D sells their share to Person E

This would result in 3 long positions of one share each, and 2 short positions of one share each, all based on one "real" share. If the above is allowed, you could imagine this occurring infinitely, allowing unlimited long and unlimited - 1 short positions, so long as the net equaled one long share.

Is this possible? Are there any regulatory or procedural systems in place to prevent the above from happening?

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    Good question. I've read some articles that state that the number of shares shorted can only be equal to the number of shares in the float but in other instances I've seen reference to the short interest exceeding 100%. That would imply that either the shares can be loaned multiple times (which I have always doubted) or that perhaps private owners can lend shares (?). Color me curious as well. – Bob Baerker Jun 15 '20 at 22:51
  • What exchange or countries are you looking for – Dheer Jun 16 '20 at 14:51
  • @Dheer USA, NASDAQ – Cowthulhu Jun 16 '20 at 15:00
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    Rhetorical question: If shares could be loaned out multiple times then why would a stock become hard to borrow? The lending process would go on forever and ever. – Bob Baerker Jun 30 '20 at 13:51
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    @BobBaerker But stocks can already become hard to borrow with short interest well below 100%. So hard to borrow isn't about literally running out of shares. Rather, not all shareholders participate in lending. If shorted stock is sold to someone who doesn't lend, it can't be borrowed again. – nanoman Jul 2 '20 at 1:12
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+300

Yes, a share can be lent and shorted more than once:

If a short-seller borrows shares from one brokerage and sells to another brokerage, the second brokerage could then lend those shares to another short-seller. This results in the same shares counted twice as "shares sold short."

Many of GameStop's shorted shares may have been borrowed, sold, and borrowed again, producing the 100.6% ratio of shorts to shares outstanding.

This rarely happens, but it has happened before.

... According to Frank Fabozzi's book Short Selling, Palm reached a peak short interest ratio of 147.6% in mid-2000.

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Yes!

And this has happened in the past, most famously in the porsche-volkswagen short squeeze

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    No, not so. The Porsche/Voldswagen short squeeze occurred because of Porsche's undisclosed purchases of VW shares as well as buying option contracts to acquire additional shares. Combined with the state's 20% ownership, there were hardly any shares available to borrow. When the short sellers ran for the door to cover, it was akin to yelling FIRE! in a crowded movie theater. – Bob Baerker Jul 1 '20 at 22:36

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