The Fool FAQ
My dad had a great collection of stock certificates from AT&T and other blue chip stocks that he and my grandfather bought, but my broker says the modern thing to do is to just let him keep my stock in his account. Which way is best?
When you acquire stock there are three ways that you can "hold" the stock. You can have the company send you a beautifully engraved stock certificate that you can keep in a safe deposit box or under your mattress; you can give the stock certificate to your broker who will keep it for you safely; or you can have your broker keep the stock in "street name."
These days, brokers don't really want to mess with stock certificates. Most discount brokers will charge you extra just to go through the process of asking the corporation to issue one. They would much prefer to hold your stock in "street name," meaning they keep it in their name and just track which shares are owned by their clients electronically.
Actually, this is a really good idea. It involves some trust on the client's part, but it has a number of advantages including: 1) Your stock is always available for immediate sale should you wish to do that. 2) You have proof of ownership in the form of your statements from the brokerage that arrive every month, so it's really hard to lose track of what you own (see the question below). 3) If your stock splits, you don't have to go through the labor-intensive process of returning your old certificate and having a new one issued. Any communications from your company such as proxy notices, annual reports, etc. are passed on to you by the brokerage, so there is no disadvantage there.
The disadvantages are pretty minor in comparison: 1) You can't sell your stock directly to another person without asking the brokerage to issue a certificate. 2) If for some reason you move and change your name and forget to notify the brokerage and lose your account number (yes, we've heard from people in this situation!), you have to go to some effort to re-establish ownership of the account. 3) You don't have those nice certificates to look at.
I was cleaning out my aunt's apartment and found a bunch of old stock certificates stashed in the top of the closet! Am I rich? How to I find out if they are worth anything?
Well, you might be rich... more likely, though, you are in possession of some interesting wallpaper or maybe a collectible. It definitely is worth checking the companies out. Even one old stock certificate can be a jackpot.
To establish value, you will need a stock trading symbol, and to get a trading symbol you need a current, accurate company name. Note: The stock price, if there is one, won't necessarily tell you the value of certificate. The number of shares it represents may have changed over the years due to stock splits (good) or reverse stock splits (not so good). What you are doing here is just establishing whether or not the company is still in business and publicly traded.
If you have the name, there are several ways to find the trading symbol. First, try the Internet. On our website at http://quote.fool.com/lookup.asp or on AOL at Keyword: Quotes (click on Lookup) you can enter the name of each company and see if it still has a stock symbol listed. If you get a hit, you can use the stock symbol to look up the price. Remember that you will need an exact name match to be sure you have the right company.
If you don't get a hit on the company name, then the company may be out of business, or it may have changed its name or merged with another company. To find that out, someone has to trace the original company. By far the easiest way to do that is to just deposit your certificates in a brokerage account. A brokerage will send them back to you if they are in your aunt's name, but in the meantime, most will look them up and establish a value for you. You will need to have either your aunt's signature or some proof of ownership transfer before you can sell them, but at least you will know if it is worth the effort.
An alternative would be to contact the "transfer agent," who will be listed on the front of the stock certificate, or contact the State Corporation Commission of the state that issued the certificate. If the transfer agent is still in business and actively representing the company or its successor, you are home free, but if it has been a while, that may not be the case. The State Corporation Commission can verify if the company is still in business and, if it is, who the current transfer agent is. But the SCC can't tell you what the stock is worth or even give you a stock symbol. You can contact most State Corporation Commissions by calling the state government's information line. It is a state government department.
Finally, you can try it the old fashioned way. Most libraries have several reference volumes for old stocks. Ask at the reference desk to see what is available in your local library. If you go when it isn't busy and are really nice, the reference librarian may help you out with your first search.
If all else fails, you can contact R. M. Smythe in New York. They specialize in researching, auctioning, buying, and selling historic paper, and will find out if your stock has any value. But, of course, this is not a free service -- they charge $75 per issue. Write them at 26 Broadway, Suite 271, New York, NY, 10004-1701, or visit their web page at http://www.rm-smythe.com. I would go this route only if you have some reason to believe that the stock has a value you can't trace.