Cashing in on collectible stock and bond
A trip to the attic or an examination of a recently
deceased loved one's safe-deposit box often results in nostalgia
as you rummage through items that you haven't seen in years -- or
perhaps never knew existed.
But sometimes among the old documents, photographs
and junk is the stuff dreams are made of -- a chance to become rich.
Well, at least a chance to give your bank account a little boost.
Would you know your chance if you saw it?
Lynne Callison of Fort Wayne, Ind., didn't.
Callison was going through her father's safe-deposit
box after he died when she found a certificate for 14 shares of
stock in a Canadian company, Scurry Rainbow Oil. That was in 1996.
Fortunately, Callison didn't toss it out like a lot of people apparently
do, but she forgot about it until last year.
"I decided to see what I could find out about
Scurry. I thought maybe they're worth a zillion dollars," says
Callison. "On the back of the certificate were phone numbers
of Canadian banks. I called, and no one in Canada knew anything
about it. I even called my own broker, and he couldn't find out
anything about Scurry."
Callison hooked up with an Arizona company called
Stock Search International, which, after considerable research,
learned that Scurry Rainbow had been bought out and that those 14
shares of stock were now worth about $3,000. Not a bad take for
a little perseverance.
"I was thrilled beyond words," says Callison.
"You always hear people find paintings in their attics that
are worth a lot of money. This wasn't like that, but it was good."
What's in your attic?
What should you do if you find an old stock or bond certificate?
Experts say you're much less likely to find an old
bond certificate because they have a specified time limit -- there's
a date when people get their money back. However, if you do find
one, bring it to a bank if it's a savings bond. If it's a corporate
or municipal bond, a broker can handle the transaction for you.
Some bond certificates, especially old war bonds,
are valuable as collectibles -- but not nearly as often as stock
certificates. Most companies that evaluate stock certificates as
collectibles can also tell you if a bond certificate has value beyond
its worth as a security.
Since there's no time limit for holding a stock, its
value as a security can be anything. Many people consider stocks
long-term investments and hold them for years hoping they will continue
to appreciate in value. But even if a company goes belly up, its
certificate may have value as a collectible. In fact, sometimes
a company that's still in business will have certificates that are
worth more as a collectible than as a security.
The early Playboy stock certificates are an example.
When Playboy stock was first issued in 1971, the certificate
was signed by Hugh Hefner and had a vignette of a naked Playboy
centerfold. Many people bought one share as a collector's item.
Times change and on later issues of the certificate the formerly
naked woman has found some clothes.
Those early certificates sell for about $275. Compare
that to a share of Playboy stock, which goes for less than $13.
Even the "clothed" certificate sells on the collectors
market for $42.50. If you found one share of either certificate,
you'd do better selling it on the collectors' market than selling
it as a security.
There's a third way old stock certificates may be
valuable. If you bought the stock, or even if you inherited it and
were given a stepped-up cost basis, you could be entitled to declare
a loss when you file your income tax if the stock no longer has
any worth as a security.
If you find an old stock certificate, and you've never
heard of the company, see if the company still exists. Yahoo, AOL,
Hoover's -- any number of financial Web sites give you a way to
plug in a company name and get current financial data.
You could consult with a stockbroker. But remember,
they're not researchers and, as in Lynne Callison's case, they don't
always come up with the right answer.
If your search of financial sites comes up empty,
it only means you have to do a little more work; it doesn't mean
the certificate is worthless. Many companies are bought out or merge,
or simply change names.
If that's the case, the state that incorporated the
company should be able to help you track that information. The certificate
shows where the company was incorporated. Call the corporation commission
in that state. Every state has a Web site -- the corporation commission
should be included in the government listings. Be aware, there may
be a charge for research, and they won't be able to tell you if
the certificate is worth anything.
Your local public library is another good source for
tracking down information on old companies. Of course, it's best
if your library has someone who is familiar with this type of search.
If not, you may want to try the Enoch Pratt Free Library in Baltimore.
It has seven full-time librarians who are well versed in researching
old stock certificates.
"It's something that we got questions on occasionally,"
says librarian John Damond. "We were trying to come up with
ideas to enhance our Web presence and services and this seemed like
a good idea. The response has been overwhelming.
"If the company doesn't exist, we have sources
that chart the course of corporate capital history. It'll say it
merged and changed its name or the charter was forfeited due to
lack of payment of fees or taxes," says Damond.
The Pratt was founded in the 1880s and may have more
resources than some newer libraries. Searches are free, but be prepared
to mail or fax a copy of your certificates.
Another thing to check when it comes to old certificates
is the company may have split its stock many times over the years.
If a company still exists, that certificate for 100 shares of stock
may be worth thousands of shares.
Finding collectible value
Whether or not the certificate is worth anything as a security,
you should check to see if the certificate itself has value as a
collector's item. The Scripophily.com
Web site will let you search its database. But you might also want
to check with a couple other places just to be sure.
Pierre Bonneau, CEO of Tucson, Ariz.-based Stock Search
International, the place that tracked down Lynne Callison's certificate,
says anything issued in the 1880s -- especially railroad, manufacturing
and oil companies -- is probably valuable.
"The most expensive collectible stock to date
sold for $136,000," says Bonneau. "It was a share of Standard
Oil Trust signed three times by John D. Rockefeller. He signed it
because it was issued to him, signed it as director and then endorsed
Not everything from that era is quite as valuable,
but many certificates will still fatten your bank account.
"A one-share certificate of American Express
from the 1860s signed by founders Henry Wells and James Fargo is
now worth about $1,000," says Bonneau. "American Express
was an express company -- a stagecoach business on the East Coast.
They transferred funds, gold bullion and IOUs. Wells and Fargo later
started Wells Fargo on the West Coast doing the same thing."
Another place that can tell you if a certificate has
collector value is R. M. Smythe in New York. Both Smythe and Stock
Search International will charge a fee, usually under $100, to research
a certificate. If the stock still has security value, an additional
commission may be charged.
A certificate doesn't have to be old to have worth
as a collectible, according to Bonneau.
"Some of the now infamous dot.coms have
collectible value depending on how big the splash was. Some sold
for as much as $500 on Ebay shortly after their demise. The collectors'
market gets inspired when something goes wrong."