Things You Might Not Know About Stock Certificates

A stock certificate from 1903
••• Public Domain/Wikimedia Commons

Ask anyone younger than 40 what a share of stock is, and they will tell you it is just a digital bit of information. They'll tell you that you can buy them at a broker online and that it is stored on their server. However, If you were to ask what a stock "certificate" was, chances are you wouldn't get a direct answer. Many of the people who have been buying and selling stocks since 1985 may have never seen a paper share of stock.

Learn some of the history behind stock certificates and what to do if you get a hold of one.

400 Years of (Known) History

In 2010, a history student from Utrecht University, working on an unrelated research project, found the oldest surviving stock. The stock was made out of parchment paper and was printed by hand with ink and a writing quill.

The stock found by the student dates back to 1606; it was issued by the East India Company, making it the first recorded company ever to issue stocks.

In 1602, Amsterdam built an exchange to trade stocks issued by the Dutch East India Company. This has given rise to the claim that the Amsterdam Stock Exchange was the first in the world.

Scripophily

If you find an old paper stock among some of your great-grandparents' belongings (or in an old antique store), it probably doesn't have any value behind it. The company that issued it is most likely long gone unless it is one of the few that has survived (in which case it might be worth something). However, the paper stock you found may have some value for a collector.

Scripophily is the pursuit or hobby of collecting old paper stock. There is an active group of people who will buy worthless stocks only for their collectibility.

Fancy Designs

Paper stocks were used to serve as proof that you owned shares of a company. At one time, they were also viewed as a sign of prestige. There may not have been much wealth in owning stocks in the distant past, so many were made with elegant designs and stenciling. This made them more appealing and made the holder proud to be an "owner." Some were so ornate they could have been mistaken for artwork.

Stock Certificates for Kids

The Disney Corporation offered stocks for kids. Shares of their stocks had full-color drawings of some of the firm's most famous characters. It was not uncommon for parents to buy their kids a single share of the company's stock. They would then frame it and put it on display in their child's bedroom like a cherished stuffed animal or toy.

Used as Wallpaper

Many people lost lots of money in the years following the great stock market crash of 1929. Large numbers of companies went out of business during the two-month-long decline in prices. Even more businesses faded out during the Great Depression that followed the crash. It was common practice for shareholders of the defunct public companies to wallpaper a room of their house with worthless paper stock as a perverse tribute to lost wealth.

More than 40% of paper value of common stock vanished in the crash of 1929.

What Is My Stock Certificate Worth?

Of course, the most interesting thing about an old stock is the chance that, no matter how far-fetched, it might be worth something intrinsically. If you find an old stock, the first thing you want to do is figure out whether the company that issued it still exists.

Depending on how old it is, the issuing company might have been bought numerous times. That doesn't mean the stock is worthless; it just means that you will have to do a bit more homework to track down its status.

Next, you want to contact the transfer agent listed on the stock. If it is old enough, you may not be able to contact anyone that can tell you anything. If you can't find anyone to contact about the stock, contact the Secretary of State in the state it was issued. The office might be able to tell you if that "worthless" stock you found is worth something.