How to read an old stock certificate

Across the top

The company’s name is printed big across the top. Copy it exactly, including “Company”, “Corporation” or “Inc.” Lots of companies had nearly the same name, and one word can be the difference.

The vignette is the engraved picture, often a train, a factory, a mine or a classical figure. It’s decoration, but it’s a big part of what collectors pay for.

The certificate number sits in one top corner, usually the left, sometimes with letters in front. It’s a serial number for this one piece of paper, and only the transfer agent’s records connect it to an owner. More on that in how to look up a stock certificate number.

The number of shares usually sits in the opposite corner in figures, and it’s written out again in words in the main text.

In the middle

The state of incorporation appears in a line like “Incorporated under the laws of the State of New Jersey.” Along with the date, it tells similar names apart and tells you which state’s records to search.

The class and par value say whether the shares are common or preferred, and sometimes give a par value like “$10 each” or “no par value.” Par value is an accounting number from when the shares were created, not what a share is worth.

The capital stock figure, on certificates that have one (“Capital stock $1,000,000”), is how much stock the company was allowed to issue in total. It isn’t what your certificate holds.

The owner’s name comes in the main sentence: “This certifies that [name] is the owner of … fully paid and non-assessable shares.” That person is the registered owner, and the shares belong to them or their estate. “Fully paid and non-assessable” just means nobody can ask for more money for them.

The transfer clause says the shares are “transferable only on the books of the corporation … upon surrender of this certificate properly endorsed.” In plain terms, ownership changes in the company’s records, not by handing over the paper.

The CUSIP number shows up on most certificates from about 1970 on: nine letters and digits that identify the company and the class of shares, often printed near the share count.

Along the bottom

The date is when this certificate was issued, usually near the signatures. It can be decades after the company was formed.

The signatures belong to two officers, often the president and the secretary or treasurer. On later certificates they’re usually printed rather than signed by hand. The corporate seal is printed or pressed into the paper, often between them.

The countersignature reads something like “Countersigned and registered” and names the transfer agent and registrar, often a bank or trust company. It tells you who kept the list of shareholders when the certificate was issued, which makes it a good lead.

The printer’s name is the tiny line in the bottom margin, such as the American Bank Note Company. Collectors like it, but it says nothing about the shares.

On the back

The abbreviations box decodes short forms that can appear in the owner’s name: TEN COM (tenants in common), TEN ENT (tenants by the entireties), JT TEN (joint tenants with right of survivorship) and UNIF GIFT MIN ACT (shares held by an adult for a minor). They tell you how the shares were owned, which matters when one of the owners has died.

The transfer form starts “For value received, … hereby sell, assign and transfer unto …” with blanks for the new owner, the number of shares, an “attorney” to make the transfer, the owner’s signature and a signature guarantee. Blank is what you want to see: the shares probably never moved with this certificate. Filled in and signed means they may have changed hands. Either way, don’t sign it yourself until a transfer agent or broker asks you to.

Legends are extra notes, like the rights of different classes of shares, or a “restrictive legend” saying the shares weren’t registered and can’t be sold freely.

Signs it was cancelled or never issued

A few things tell you the paper itself is the only value left. Punched holes, a “Cancelled” stamp or perforation, or cut-out signatures mean the certificate was cancelled, usually because the shares were exchanged, sold or replaced. “Specimen” printed or punched across it, with a certificate number of all zeros, means it’s a printer’s sample that was never issued. And a certificate with no owner’s name filled in, or one still attached to a stub from the company’s certificate book, was probably never issued to anyone.

What to do with what you’ve read

The name, state and date are enough to start tracing what became of the company, and our guide on how to find out if an old stock certificate is worth anything takes it from there. Hang on to the certificate number, the number of shares and the owner’s name too. Those are exactly what the transfer agent will ask for if the shares turn out to be good, as covered in how to cash in old stock certificates.