Disney Kisses Paper Stock Certificates Goodbye

Those colorful Disney (NYSE: DIS  ) stock certificates are about to become even greater collectibles. 

A week from today, Disney will no longer be offering paper certificates to verify ownership. The family entertainment giant's board is amending its bylaws, moving that all shares will be "issued, recorded and transferred solely in uncertificated book entry form" starting on Oct. 16.

In this file product image provided by OneShare, a single share of stock from The Walt Disney Company is shown. AP Photo/OneShare, File.

This will be bad news to investors who wanted to pick up a share or two just to have the frame-worthy certificates around, but it also pays to see it from Disney's perspective. It costs a lot of money to service odd-lot shareholders with all of the corporate mailings of proxy statements, annual reports, and annual dividend checks. The media bellwether may try to explain away the decision as a way to protect the environment, or a pivot point to the inevitable paperless future, but everyone knows that, at the end of the day, it's all about saving money.

Disney isn't the first corporate giant to nix paper certificates in favor of electronic record keeping. GiveAShare -- a site dedicated to selling single shares as gifts -- has a page lamenting the many companies that have moved away from the practice. Apple stopped offering stock certificates three years ago. Microsoft followed suit last year. Facebook decided not to offer paper shares at the time of its IPO last year. 

Disney isn't even the first theme-park operator to go this route. (SeaWorld Entertainment went electronic shortly after this year's IPO.) However, it's certainly the most prolific. It's GiveAShare's most popular order, and one can only imagine that orders will spike in the coming days at sites including OneShare and GiveAShare, as collectors try to get in before that window closes next week.

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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5/25/2016 11:00 AM
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