6 Things You Might Not Know About Stock Certificates

Stock Certificates Have Gone From Parchment to Digital Bits

Ask anyone under the age of forty what a share of stock is and they will tell you it is just a digital bit of information, stored on a broker's server. However, If you were to ask any of those you queried what a stock "certificate" was, chances are you would get a blank state that says, "I have no idea what you are talking about pops." And, while the investment world is filled with savvy investors who have been buying and selling stocks since 1985, they too may have never seen a physical share of stock.

However, the history of the stock certificate is full of interesting facts dating back to 1606 when parchment paper was king.

1
A Rembrandt From IBM

A stock certificate from 1903
1903 stock certificate of the Baltimore and Ohio Railroad. Public Domain/Wikimedia Commons

Stock certificates used to serve as the physical proof that you owned shares of a company and were considered a sign of prestige, if not wealth. This was so much the case that many certificates were made with fancy designs and ornate engravings, often resembling artwork.

2
Stock Certificates for Kids

This was definitely the case with shares of the Disney Corporation which featured full-color . It was not uncommon for parents to buy their children a single share of the company's stock in order to frame it and put it on display in their child's bedroom, much like a cherished stuffed animals or toy.

3
I Love What You've Done With This Room

During the years following the , it was common practice for shareholders of now-defunct public companies to wallpaper a room of their house with worthless stock certificates as a perverse tribute to lost wealth.

4
A Legal Type of Currency

At one time, the process for printing a stock certificate was as guarded and secretive as printing currency is today because in a sense it was a currency in and of itself. For this reason, there were only three companies in the United States that were authorized to print the stock certificates of publicly held companies.

5
Four Hundred Years of History

In 2010, the was found by a history student from Utrecht University who was working on an unrelated research project. The certificate was made out of parchment paper and was printed by hand with ink and a writing quill.This, now historic document, dates from 1606 and was issued by the Dutch East Indies Company which was also the first company to ever issue stock certificates.

6
Scripo What?

If you find an old stock certificate among one of your deceased relatives belongings (or in an old antique store) it probably doesn't have any intrinsic value. That's because the company that issued it is most likely long gone. However, if you're at all familiar with the PBS TV show "Antiques Roadshow," the certificate itself may have some collectible value.  

Scripophily is the pursuit or hobby of collecting old stock certificates and there is an active community of collectors who will buy worthless certificates simply for their collectibility. 

Is That Stock Certificate Really Worthless

Of course, the most interesting thing about an old stock certificate is the chance; no matter how far-fetched; that it might actually be worth something intrinsically. If you find an old certificate, the first thing you want to do is determine whether the company that issued it still exists. Depending on how old it is, the issuing company might have been bought out, sometimes numerous times. That doesn't mean the stock is worthless, just 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 certificate and if that doesn't work, contact the Secretary of State of the state it was issued in. Who knows, that "worthless" certificate just might be worth something.