How to Find the Value of Old Stock Certificates and Cash Them In

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Old stock certificates are worth what the shares they represent are worth today, and that answer comes from tracing the issuing company through every merger, split and name change since the certificate was printed. Read the company name, CUSIP number, state of incorporation and registered owner off the certificate, find the company’s current successor and its transfer agent, and ask the transfer agent whether the certificate still represents valid shares and how many it now equals. If it does, you can sell through the transfer agent or move the shares to a brokerage account. If the company dissolved with nothing left for shareholders, the certificate has no investment value, but it may still sell to collectors.

What to read on the certificate

Start with four items, all usually printed on the face:

• Registered owner’s name. This tells you who has the legal right to the shares. If it is not you, you will need documents showing the shares passed to you.
• Company name. Many companies were acquired, merged or renamed. General Electric still exists, yet it has been split up, and the GE ticker now belongs to GE Aerospace.
• CUSIP number. A new nine-character number is assigned when a security changes its name, splits or undergoes another event that affects its certificates, and those changes are recorded, so searching the original number leads to the current equivalent. Outside North America, ISIN or SEDOL numbers play a similar role.
• State of incorporation. Corporations register with a state, usually through the secretary of state, whose business records can show name changes, mergers and dissolutions.

The certificate number, issue date and number of shares also matter: the issue date tells you where to start tracing the company’s history, and the share count is the starting figure you will adjust for every later split or exchange.

Check for signs of cancellation as well: punched holes, “canceled” stamps, perforations or a transfer section that has been signed over. A canceled certificate was surrendered at some point and no longer represents ownership.

Tracing the company to today

If the company still trades under the same name, a symbol lookup gives you the ticker. Old IBM shares are a straightforward case: the questions are how many splits have multiplied the original share count and whether dividends were paid, reinvested or left unclaimed. The transfer agent can answer both.

When the name has disappeared, you have three main research routes:

1. A brokerage. Major discount brokers can research securities that have been defunct for more than 10 years. With the CUSIP, they can reconstruct splits, reorganizations and name changes, and tell you whether the company still trades or went out of business.
2. The secretary of state in the state of incorporation, which can show what happened to the corporation legally.
3. A stock search firm, covered below, if your own research stalls.

Once you know the current company, find its transfer agent; the company’s investor relations department or website will name it. The transfer agent maintains the shareholder register, issues and cancels certificates, and moves ownership from one name to another.

Example: 100 shares of GTE common stock issued in 1997

GTE no longer exists under its own name. In 2000, GTE merged with Bell Atlantic to form Verizon Communications, and GTE shareholders received 1.22 shares of the combined company for each GTE share. Bell Atlantic shareholders kept their shares one for one in the new company, which is why old Bell Atlantic certificates also lead to Verizon.

Assuming the 100 shares were still registered to the owner when the merger closed and nothing else was done with them:

• 100 GTE shares × 1.22 = 122 Verizon shares
• Market value = 122 × the current Verizon share price
• Adjust for anything that happened after 2000: later Verizon splits, spin-offs that may have issued shares of other companies to holders, and dividends paid over the years, which may have been mailed, reinvested or held as uncashed checks

The arithmetic gives an estimate. Only Verizon’s transfer agent can confirm the actual position, because the owner may have sold the shares, the certificate may have been replaced as lost, or the account may have been turned over to a state as unclaimed property. You need the certificate, the registered owner’s details and, ideally, the certificate number when you contact them.

Cashing in the shares

Transfer agents can be strict about paperwork, and each sets its own procedures, so request their instructions before mailing anything. Most cases follow one of these paths:

• Move the shares into book-entry form. The Direct Registration System (DRS) lets the transfer agent hold your shares electronically in your name. From there you can sell through the agent’s own service or transfer the position to a brokerage account.
• Deposit the certificate with a broker. Many brokers accept physical certificates registered in the account holder’s name, though some charge a fee or decline very old or unusual ones. Ask before sending.
• Sell directly through the transfer agent, if it offers that service for the company’s shares.

Changing the name on the shares usually requires a stock power or completed transfer form and a medallion signature guarantee, which banks, credit unions and brokerages provide. Send certificates by trackable mail and keep copies of both sides.

Inherited certificates

If the registered owner has died, the transfer agent will want proof that the shares passed to you. Depending on the estate, that may include a death certificate, letters testamentary or letters of administration showing who the executor is, a probated will with the executor’s signatures, and an affidavit of domicile. Once the shares are re-registered in your name, you can deposit them with a broker and sell.

For U.S. taxes, inherited shares generally receive a cost basis equal to their value on the date of death. For shares you bought yourself, you need the original purchase records, such as confirmations, dividend reinvestment statements and year-end tax forms, to calculate the gain.

When the answer changes

The company went bankrupt. Common shareholders are paid last in bankruptcy, so the shares may be worthless. Research it anyway: if the company reorganized or another firm acquired its assets, shareholders may have received shares in the new entity or a cash settlement.

The company went private or dissolved. If it is no longer public, the trail may end, or the shares may have been converted into a cash payment during a buyout. Where real money or ownership rights are at stake, a lawyer can advise on whether you still have a claim.

The shares were escheated. When an account goes dormant and mail is returned, transfer agents eventually report the shares to the owner’s state unclaimed property program, which may sell them. The certificate then points to a claim with the state, typically for the cash proceeds, rather than to the shares themselves. Search the unclaimed property database of each state where the owner lived.

The certificate is lost. Shares registered in the owner’s name don’t vanish with the paper. The transfer agent can usually issue a replacement or move the shares to book-entry form, often after you buy an indemnity bond against the original resurfacing.

Collectible value and scripophily

Collectors in the hobby called scripophily buy stock and bond certificates, especially from companies that no longer exist, for their history, engraving and design, or ownership trail; some are prized for the signatures of famous executives or previous owners. Age alone does not settle the price: rarity, condition, the issuing company and any notable signatures all affect what a collector will pay.

How long it takes and what research costs

A certificate from a company that still exists under the same name can be resolved in a few weeks. One that passed through several mergers, acquisitions or name changes can take months, particularly if you need a professional search.

Stock and bond search firms such as RM Smythe investigate for a fee, and some will offer to buy a certificate with no trading value as a collectible. Their fees can exceed what the stock is worth, so try a broker or the transfer agent first and ask for a quote before paying for research.

FAQs

The Bottom Line

Anyone holding a paper certificate, especially an inherited one, should treat it as a possible claim until a transfer agent says otherwise. Trace the company through the CUSIP, a broker or the secretary of state, then ask the current transfer agent what the certificate represents. Try those free routes before paying a search firm, whose fees can exceed the shares' value, and check collector interest if the stock proves worthless.