Selling Stock Certificates

By Dave Guilford
Wikimedia Commons

Stock certificates can be fascinating snapshots of our country's financial history. They can also be as liquid as cash. If you find yourself in possession of stock certificates and you want to sell them, this article will explain how.There are two types of stock certificates. There are the certificates of companies that are still in business and whose stock is actively traded. An example of these would be AT&T; or General Motors. There are also the certificates of companies that are no longer in business but their certificates hold some value as a collectible. An example of this would be the Baltimore and Ohio (B&O;) Railroad Company, incorporated in 1830.

Selling Certificates of Actively Traded Issues

Look up the stock symbol. This is as simple as visiting Yahoo! Finance and typing in the name of the company. Click on “Symbol Lookup.”

Get a quote on the stock. Again, a visit to Yahoo! Finance will give you the current quote on the stock.

Determine how many shares of stock you have. This may be a little more involved than you think. First, the number of shares is printed on the face of the certificate. Multiply that number by the current share price to determine how much it is worth. However, your certificate may be worth more or less than that and more research is required.Often over an extended period of time, the stock of a given company will split forward or in reverse, multiplying the number of shares or dividing the number of shares by a given factor. For example, if you have a certificate for 100 shares of XYZ stock from 50 years ago and the stock has split 4 for 1 in the meantime, that 100 share certificate now represents 400 shares. Conversely, if XYZ went through a 10 for 1 reverse-split in the same time frame, your 100 share certificate would now represent 10 shares.The easiest way to determine how many shares your certificate represents is to call the transfer agent and give him the CUSIP number from the back of the certificate. You can find the transfer agent for any company by calling the company themselves or looking it up in the SEC documents relating to the company. The CUSIP (Committee on Uniform Securities Identification Procedures) number is a nine-digit alpha-numeric number located on the back of the certificate that the transfer agent will use to determine the exact number of shares.

Make sure the certificate is in your name. Your name must appear on the face of the certificate. If it does not, you will have to contact the transfer agent, prove the stock belongs to you, and request a new certificate to be issued in your name.The only time this is not necessary is when the certificate is signed on the back by the person named on the face of the certificate. A signed certificate is as good as cash, so be careful with it. Literally anyone who picks a signed stock certificate up on the street can cash it in. It is the same thing as a signed check.

Sign the certificate and deposit it into your brokerage account. Remember, once signed a stock certificate is as good as cash. If you don't have an open brokerage account, most local discount brokers will allow you to open a temporary account for the one-time disposition of stock certificates. Charles Schwab is one of the companies that offer this service.

Selling Certificates of Defunct Companies as Collectibles

Determine if the certificate is worth anything. Some are not. Some certificates are considered collectibles because they represent shares in companies that were famous at one time. Others are collectible because they represent shares in companies that were social oddities. An example of this would be stock certificates from The Mustang Ranch, a legal Nevada brothel shut down by the IRS in 1999, or shares in the Playboy Corporation, whose certificates had a pin-up girl on their face.To determine the potential value of your certificates, do some research on the Internet and call a few collectors. A link is provided in Resources below.

Sell to a collector. This may be the easiest way to sell an old stock certificate. Agree to a price up front and sell the certificate to a private collector.

Sell the certificate by auction. There are several collectibles auction houses available if the certificate is worth enough. Otherwise, there is always eBay.

Donate the certificate. If you don't need the cash and could use a tax deduction, donate the certificated to charity and let them handle the sale of it. You'll get a write-off and the money will go to a good cause.

About the Author

Dave Guilford has been a freelance newspaper and magazine writer for more than 10 years. As a former stockbroker, commodities trader and life insurance agency owner, he writes on personal finance, investing, insurance and retirement planning. A former international yacht racer and yacht brokerage owner, Guilford is a frequent contributor to "BoatU.S. Magazine." His work has also appeared in "Latitudes & Attitudes Magazine."