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Don’t Throw Out Those Old Stock Certificates!

Estate Planning

Every once in a while, we get the following question:  “I came across these old stock certificates.  What should I do with them?”  Stock certificates come from any number of places, particularly when you’re clearing out the effects of a deceased loved one.  Whether you find the certificates in an attic, safety deposit box, or in a drawer, you might be tempted to just throw them out and move on.   Don’t!  

Regardless of what you think, there’s no benefit to throwing out old certificates right away.   Instead, this article walks you through a recent example, and outlines what you should do if you find those stock certificates.

Introduction

We get lots of emails from ‘prospective clients.’  In almost every case (except for spam), I usually try to take some time to walk through the question to see how I might be able to help.  Even if the questioner doesn’t become a client, it doesn’t take that long to point that person toward an online resource, refer to another professional, or simply answer the question.  And if the question is interesting enough, then I really like to see how I can dig into it and see what I can find.  

So, enter the following question:  “I have several stock certificates for companies from the fifties, and would like to know what I have.”  So we’ll walk through the research we did, and what we found out.

Step 1:  Gather some information

Sometimes, the only information you have is what is on your stock certificate—especially if you didn’t get the back story on why Grandpa bought those stocks back in the day.   Fortunately, your certificate will probably have lots of information.  At the very least, you can expect:

  • Name of the company
  • Number of shares
  • Date of issue
  • Certificate number
  • Who signed the certificate

You should (but not always) also be able to see the following:

  • Transfer agent.   Public companies usually use a transfer agent to keep track of the individuals and entities that own their stocks and bonds.  
  • State or local jurisdiction of registration.  When having to dig deep into a company’s background, just knowing the state (or even the country) where the certificates were registered can help a lot.  

In our case, we were able to pull up a LOT of information just by gleaning it from the share certificates.

Step 2:  Is the company listed on a stock exchange?  

If you inherited shares of AT&T, or Coca-Cola, you can probably guess that they’re publicly traded companies (both are listed on the New York Stock Exchange).  For these companies, their home page usually has an investor services page that can help you determine the value of your shares of stock.  The most common U.S. stock exchanges include:

  • New York Stock Exchange (NYSE)
  • NYSE American (formerly known as AMEX)
  • Nasdaq Stock Market (NASDAQ)

If your company is a foreign one, you may have to look on the stock exchange for that respective company.   You can likely find the stock exchange for the country in question on this Wikipedia page.  (Note:  I usually don’t use Waikipedia as a reference.  However, it can be a great source of factual (not opinion-based) information.  In this case, I couldn’t find a more comprehensive listing of foreign stock exchanges—please email me if there’s a better site).

If your company isn’t listed on an exchange, it might still be traded as an over-the-counter (OTC) stock.   OTC stocks (sometimes called ‘penny stocks’) are usually traded between brokerage firms, as opposed to on a centralized exchange.   OTC Markets is one of the largest sources of information on OTC stocks, and has a company directory where you can search for your company’s name.

Step 3:  Is it registered with a state?

Sometimes, you might not get that lucky.  Your company might be:

  • Lightly (or not at all) traded.  This would apply to closely-held companies
  • No longer in business

In this case, you probably won’t see it on any exchange, or traded over the counter.  The next step—look up the governmental site for the specific state your company is (or was) registered in.  For example, some of the companies I researched were in Florida, so I searched Sunbiz, the website that contains company registration information for the State of Florida.  

You should at least be able to learn about whether the company is still registered, obtain information about 1 or more of the officers, and possibly find some contact information (if the company still is registered).

Step 4:  Google is Your Friend

If you’re not able to find the state of registration (or in a case where I had to research companies in Canada), then turn to Google.

I won’t belabor specific Google advice here, but will offer a couple of tips to help reduce the size of the haystack you’re searching:

  • Search for the company as a phrase (use quotation marks)
  • Include any information from the certificate that might be useful (state, transfer agent, officers, etc.)

You might end up spending some time here, as one search might lead to another, and another, etc.

In my case, it turns out that the person who contacted me had inherited certificates for 7 different companies—either defunct uranium mines or Florida-based small businesses.   So I spent a Friday morning researching and found out the following:

  • 4 uranium mine companies, based in Canada.  All defunct.
  • 3 Florida-based companies.  Two of them were defunct, but one was still in operation.  I called to get some more information and ended up talking with the owner (original president’s son).  Put them in touch, and hopefully they work something out (not my business).

During this time, I discovered scripophily.  

Step 5.  What is Scripophily?

Don’t know what that is?   Don’t worry—neither do most investment professionals, much less people who don’t like investing.  But some people like baseball cards or stamps, while others want to find and collect certificates issued by the Atlantic & Pacific Guano Company or signed by Buffalo Bill Cody.

And this might be considered a useful last resort for people who realize their certificates are for companies that are now worthless.  While the companies might be worthless, the paper is probably not.  Many certificates on Scripophily.net are listed for hundreds (and thousands) of dollars each.  

Are your certificates worth this much?  Maybe.   Maybe not.  But something is better than nothing.  And at least there’s something cool about finding a nice home for those pieces of paper that were sitting in the attic (or garage, basement, drawer, etc.).

Conclusion

Just like many other antiques, family heirlooms, or ‘collectibles’ you might come across, old stock certificates (and bond certificates, too, for that matter) might have value.  Perhaps it’s a lost family fortune, or simply a chance to learn a little more about your family tree.  Either way, DON’T THROW OUT THOSE OLD CERTIFICATES!

If you come across a family inheritance (paper certificates or otherwise), and have questions, please contact us!  We would be more than happy to schedule a complimentary phone call to see how we might be of service to you.


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