How to Cash in Stocks From Defunct Companies

by Cynthia Myers

If you inherited stock certificates from a relative or unearthed them in the attic, or if you own stock in a company that goes under, you may want to cash in the stock. Stocks from defunct companies, with a few exceptions, have no cash value. You may, however, be able to realize some income from selling very old certificates, which are often beautifully engraved and designed, as collectibles. Careful research will reveal the value of your stock.

1. Search on the internet using a general search engine for the name of the company as shown on the stocks. Determine if the company is truly defunct or merely absorbed by another company. When one company takes over another they may reissue stock in the new name or pay all or part of the value of the former company's stock.

2. Visit a large library and ask the research librarian to help you research the company history in the "Capital Changes Reporter" database, to which some larger libraries subscribe. This online service traces company histories and will tell you if the company that issued your stock was bought out by another company. Or you can search printed references such as the "Directory of Obsolete Securities" or the "Robert D. Fisher Manual of Valuable and Worthless Securities," which provide information about defunct companies, including the dates their stocks were officially declared worthless.

3. If you already have a relationship with a stockbroker, contact him or her and and explain that you have stock from a company that has been absorbed by another company -- if your research reveals this to be the case. The broker should be able to tell you if the new company will pay anything for your stock.

4. Research the value of old stock certificates to collectors. The hobby of collecting old stock certificates is known as scripophily. Consult sites such as eBay, the Scripophily Society and Goldsheet's Obsolete Securities (see Resources) to see if your stock certificates have any value. Rarer stocks, exceptionally beautiful certificates, and certificates from historically significant companies have the most value to collectors.

5. Contact a scripophily dealer to arrange for sale of your certificates if you determine they have value to collectors. Goldsheet's Obsolete Securities lists dealers, as does the Scripophily Society. You may also decide to sell the stock certificates yourself by listing them for sale online.

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