The U.S. government amasses millions of dollars of unclaimed assets every year. Some of those assets are old, uncashed dividends and stocks.
Some people have found old stock certificates in their homes. At one time, the purchases were a great source of accomplishment and pride. Over the years, however, the owners may have filed them away, only to forget about them.
You may find old stock certificates hidden in the attic after inheriting property from relatives. Also, you may have forgotten about stocks you’ve purchased years ago. In either case, the find could pay off nicely. This could be the case whether the certificate still holds value or if it’s a hot collector’s item.
If you’re lucky enough to find or otherwise have possession of old stock certificates, guess what? It’s not as hard as you might think to find out their value and cash in. However, it does take time. Read on to find out how the discover whether you’re holding on to a fortune.
Getting Started With Cashing In Old Stock Certificates
First, you must find out if the issuing company is still active. You can do this by investigating the instrument from home or at your local library.
If it was issued by an active and well-known company, you’re in luck. That’s about all the research that you need to do. Your next step is to visit the investor relations web page. If this isn’t the case, however, you’ll have to do some research.
The easiest place to start is with free online company research sites. Several companies maintain databases with information about active stock issuing enterprises. To name a few, you can try Dun & Bradstreet, Yahoo! Finance and the Wall Street Journal.
Enter the name of the company on the stock certificate in the company or business search box. If the company is still active, you’ll find results in seconds.
Next, you’ll need to learn how to read old stock certificates. First, look for any signs that suggest the stock certificate is still valid.
A valid stock certificate bears the name of the beneficiary. Also, all seals and signatures should be undamaged. In other words, there should be no hole punches or stamps over any of the seals or signatures on the certificate. In addition, the back of the certificate should be clean and free of marks.
The certificate might bear stamps, signatures or seals on the back. If so, the shares have been transferred to another owner. Also, the certificate will be canceled on the front with a stamp or hole punch.
In this case, the instrument is no longer legal tender. Still, there is a way to cash in on canceled instruments – more on that in a moment.
Researching Old Companies
Ideally, you want to find out as soon as possible if your stocks hold any value. Resultantly, it makes good sense to start doing a little research on your own.
Prepare yourself for an afternoon of research at your local library. Bear in mind, you do need a basic knowledge of securities for do-it-yourself stock research.
The library houses corporate change directories. You can use them to research company histories. Also, you can access paid online company information services for free. This is obviously a better deal compared to paying to do it from home.
The library keeps this kind of information in the reference section. There, you’ll find resources such as the Directory of Obsolete Securities. The Manual of Valuable and Worthless Securities may also help you in your quest.
The Survey of Predecessor and Defunct companies is another good corporate change directory. You may also have luck with the Capital Changes Reporter.
Your research will tell you which company, if any, is currently linked to the certificate. The listings you find will give you key information. This could include company name changes as well as changes in corporate structure. It will also give you information about how the exchange affected existing stocks.
Your research could show the company changed names. After that, it may have been liquidated. You may also find out whether your shares were lost or if they could still hold value.
Continue to follow the chain of company histories. You must keep going until you reach the company that’s still active. You will eventually determine who might reimburse the stock certificate.
As you can see, this can become a long, winding and tedious process. At some point, it may make sense to seek help.
If you have a broker, they may do the research for you. If you don’t have one, you can contact a large discount brokerage house that will conduct the research for you for a modest fee.
Alternatively, there are companies and individuals who specialize in researching old stock certificates. The services of a stock certificate researcher may cost as little as $25 to $50.
The stock certificate researcher can save the transfer agent a great deal of time. Also, their work could speed up the ownership transfer.
Learning More About Your Certificate Through the State
You can also find out information about your old stock certificate through the state. Contact the Secretary of State Office of the issuing state on the certificate.
This usually involves a fee. To do this, you’ll need the stock certificate CUSIP number.
By law, every valid stock certificate must have a CUSIP number. The number is issued by the Committee on Uniform Security Identification Procedures.
The CUSIP number is very important. It’s used to track every company reorganization as well as stock changes and splits.
The number identifies stocks and bonds. You’ll find them on the instruments, purchase confirmations, and financial statements. You may also find the CUSIP number on the official stock certificate documentation.
You can also look up the CUSIP number issued by the Municipal Securities Rulemaking Board. To do this, use the Electronic Municipal Market Access (EMMA) website.
Approaching the Finish Line
Now you’ve identified the company and your CUSIP number. You have the information you need to investigate the worth of your old stock certificates.
The transfer agent’s name should also be on the back of your stock certificate. If the stock certificate is very old, however, that information may be out-of-date as well. You can find the right agent by contacting the current company’s stockholder services office.
Companies very seldom employ in-house transfer agents. Therefore, you need to contact the current company transfer agent. They will tell you how to issue a return on stock certificates.
The current transfer agent will inform you if you can cash out your stock certificates. This is where proving that you have a right to the stock comes into play.
Not anyone can cash in a stock certificate. Most stocks are issued to an individual, but they do transfer to heirs. In this case, the transfer agent will tell you that you need to provide a probated will if you inherited the certificate. However, once the transfer agent registers you as the owner, you can do with it as you please.
There is, however, something called bearer stocks. This means that whoever possesses the physical certificate owns the instrument. If you can, they will walk you through the process.
When companies change hands, this can drastically change the value of a stock certificate. The agent will explain all the corporate changes since the stock was issued. They will also explain how changes in company ownership affect your stock value. You may even have unpaid dividends waiting for you to collect!
Sealing the Deal
If you’ve gotten this far, the transfer agent will ask you to complete the transfer form. The transfer form is located on the back of the stock certificate.
You must complete the form in the presence of a notary public. Next, you’ll send your old stock certificates to the transfer agent via certified mail. The broker will notify you when they receive your old stock certificates.
You must also include any other requested documentation to prove ownership of the stock certificate. More importantly, always remember to insure stock certificates that you ship by mail.
Now you’re ready to redeem your old stock certificate. The transfer agent can transfer your shares to your brokerage account at their present value. Also, they can mail you new certificates issued in your name. Minus any brokerage fees, you now own the current market value of the old stock certificates.
Yet Another Way to Cash in on Old Stock Certificates
Sometimes, a stock certificate may look valid, but it holds no worth, or it’s been canceled – as mentioned above. If, in the end, you find out that your stock has no value – don’t give up.
Some stocks are still quite valuable as collector items. In fact, old bond and stock certificates are popular among collectors.
You can search online for scripophily brokers. These agents specialize in trading collectible stocks and bonds.
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