Author Topic: Cashing in old GM stock certificate?  (Read 22944 times)

MaxRules

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Cashing in old GM stock certificate?
« on: June 05, 2015, 05:40:05 PM »
I have a General Motors stock certificate (5 shares) from 1989. It looks like a title to a car, just a formal looking paper that says it is five shares. Two questions here:
How can this be sold?
Is this still good since GM took the bailout and was (?) bankrupt?

Thanks!

TomTX

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Re: Cashing in old GM stock certificate?
« Reply #1 on: June 05, 2015, 07:04:33 PM »
Can it be sold? Yes.

...but only as a curiosity or collectible.  The "Old GM" shares were canceled as part of the bankruptcy. The "New GM" was incorporated in 2009.

The other way to get something out of it is if you can declare a loss on your taxes.

forummm

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Re: Cashing in old GM stock certificate?
« Reply #2 on: June 05, 2015, 07:14:39 PM »
People sell old worthless paper stock certificates on Ebay. Check out Enron for example.

fartface

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Re: Cashing in old GM stock certificate?
« Reply #3 on: June 05, 2015, 08:06:42 PM »
GM FUCKERS: I had $3K sunk in that company in 2008...then they go "bankrupt" in 2009. Now, they have had record breaking profits these five years past...

How this is legal is beyond me. Why there's not a class action lawsuit. Aaaahhh corporate frauds...gotta love 'em.

DavidAnnArbor

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Re: Cashing in old GM stock certificate?
« Reply #4 on: June 05, 2015, 09:07:35 PM »
GM FUCKERS: I had $3K sunk in that company in 2008...then they go "bankrupt" in 2009. Now, they have had record breaking profits these five years past...

How this is legal is beyond me.

Companies are allowed to undergo bankruptcy just like people can, debts can become canceled, and the declining car sales in 2009 that led to the bankruptcy gave way to record car sales in 2015 to the new GM that exists today.

forummm

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Re: Cashing in old GM stock certificate?
« Reply #5 on: June 05, 2015, 09:52:13 PM »
GM FUCKERS: I had $3K sunk in that company in 2008...then they go "bankrupt" in 2009. Now, they have had record breaking profits these five years past...

How this is legal is beyond me. Why there's not a class action lawsuit. Aaaahhh corporate frauds...gotta love 'em.

Investing in stocks is inherently risky. Investing in individual stocks is much more risky than investing in index funds. Investing in individual stocks of companies that have serious, well-known, and long-term financial struggles (e.g. GM in 2008) is even more risky. If you didn't know that, or are not willing to take those risks, I suggest not investing in any individual stocks.

TomTX

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Re: Cashing in old GM stock certificate?
« Reply #6 on: June 06, 2015, 06:51:55 AM »
GM FUCKERS: I had $3K sunk in that company in 2008...then they go "bankrupt" in 2009. Now, they have had record breaking profits these five years past...

How this is legal is beyond me. Why there's not a class action lawsuit. Aaaahhh corporate frauds...gotta love 'em.

It's easier to make profits when you get out from under a crushing debt load.

If they hadn't done the bankruptcy, GM would have just been broken up for parts to partially pay off the debtholders. Instead, the debtholders mostly got stock in the new company.

MaxRules

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Re: Cashing in old GM stock certificate?
« Reply #7 on: June 06, 2015, 11:10:28 AM »
Thanks everyone, I had suspected the bankruptcy had wiped out all the old shares. How would something like this normally be sold if it were still good and how much would the 5 shares be worth? I would assume more than just the cost of five shares bought today, since dividends and stock splits should have added up after 26 years.

rmendpara

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Re: Cashing in old GM stock certificate?
« Reply #8 on: June 06, 2015, 11:15:30 AM »
Normally you have to "deposit" the certificate with a stock agent to basically convert the paper share of old to new shares with CUSIP and other stuff. Search Google and you'll see that many brokers offer this (Fidelity to name one that showed up, and likely many or all others).

In some cases, the certificates can be worth more than the shares themselves... as is the case with old GM.

TomTX

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Re: Cashing in old GM stock certificate?
« Reply #9 on: June 06, 2015, 02:08:02 PM »
I wonder if you could just do a private sale with a receipt for tax loss purposes.

a1smith

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Re: Cashing in old GM stock certificate?
« Reply #10 on: June 06, 2015, 03:03:46 PM »
GM FUCKERS: I had $3K sunk in that company in 2008...then they go "bankrupt" in 2009. Now, they have had record breaking profits these five years past...

How this is legal is beyond me. Why there's not a class action lawsuit. Aaaahhh corporate frauds...gotta love 'em.

Happens all the time.  K-Mart did the same thing.  It's not corporate fraud, it is US bankruptcy law.

a1smith

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Re: Cashing in old GM stock certificate?
« Reply #11 on: June 06, 2015, 03:50:38 PM »
Thanks everyone, I had suspected the bankruptcy had wiped out all the old shares. How would something like this normally be sold if it were still good and how much would the 5 shares be worth? I would assume more than just the cost of five shares bought today, since dividends and stock splits should have added up after 26 years.

Those five shares are worth $0 on the stock market.  Dividends don't factor into the 26 year old value of the shares, the dividends would be cash deposited into your account.  The stock splits would just give you more shares; the splits affect your cost basis.

Most brokers will buy a worthless stock from you for a small amount (< $1) just so you have a sale transaction.  Of course, they will charge you a commission on the sale! :-D  Then you will have the purchase/sale data so you can file taxes.  However, you need to know the cost basis of the stock so you can declare a long-term loss (26 years.)

Here is split/spin off data Motors Liquidation Company - Historical Stock Splits / Spin-offs.  In the last ~26 years there was one split in March 1989; it may or may not affect you depending on purchase date.  However, there are three spin offs which will affect your cost basis.  For Dec 97 Raytheon spin off you didn't own enough GM to get a full share so you were paid cash value of your fractional share.  For May 99 Delphi spinoff you should have gotten 3 shares of DPH and cash for remaining fractional share.  The DPH stock is worthless now (bankruptcy). In May 2000 you should have gotten 5 shares of GMH (Hughes) stock and cash for remaining fractional share.  I'm not sure of GMH's fate but the ticker is delisted.  Hughes is still around. The value of these spin offs reduce your cost basis.  Twenty six years ago (6/5/15) GM stock was $40.50 so the pre-spinoff cost basis was $202.50 plus commission (just an example, only applies if 6/15 was really your purchase date.)

Once you figure out your cost basis you can figure out how much you will save on your taxes vs selling the certificate as a collectible.  Or maybe the sentimental value is higher.

For the stock to be good it would have to be stock in General Motors Company (the new GM).  On Friday, 6/5/15 it closed at $35.12 so five shares would be worth $175.60.  It would be sold just like any other stock on a stock exchange using a brokerage account.
« Last Edit: June 06, 2015, 03:56:03 PM by a1smith »

MaxRules

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Re: Cashing in old GM stock certificate?
« Reply #12 on: June 08, 2015, 10:15:44 AM »
Thanks everyone, I had suspected the bankruptcy had wiped out all the old shares. How would something like this normally be sold if it were still good and how much would the 5 shares be worth? I would assume more than just the cost of five shares bought today, since dividends and stock splits should have added up after 26 years.

Those five shares are worth $0 on the stock market.  Dividends don't factor into the 26 year old value of the shares, the dividends would be cash deposited into your account.  The stock splits would just give you more shares; the splits affect your cost basis.

Most brokers will buy a worthless stock from you for a small amount (< $1) just so you have a sale transaction.  Of course, they will charge you a commission on the sale! :-D  Then you will have the purchase/sale data so you can file taxes.  However, you need to know the cost basis of the stock so you can declare a long-term loss (26 years.)

Here is split/spin off data Motors Liquidation Company - Historical Stock Splits / Spin-offs.  In the last ~26 years there was one split in March 1989; it may or may not affect you depending on purchase date.  However, there are three spin offs which will affect your cost basis.  For Dec 97 Raytheon spin off you didn't own enough GM to get a full share so you were paid cash value of your fractional share.  For May 99 Delphi spinoff you should have gotten 3 shares of DPH and cash for remaining fractional share.  The DPH stock is worthless now (bankruptcy). In May 2000 you should have gotten 5 shares of GMH (Hughes) stock and cash for remaining fractional share.  I'm not sure of GMH's fate but the ticker is delisted.  Hughes is still around. The value of these spin offs reduce your cost basis.  Twenty six years ago (6/5/15) GM stock was $40.50 so the pre-spinoff cost basis was $202.50 plus commission (just an example, only applies if 6/15 was really your purchase date.)

Once you figure out your cost basis you can figure out how much you will save on your taxes vs selling the certificate as a collectible.  Or maybe the sentimental value is higher.

For the stock to be good it would have to be stock in General Motors Company (the new GM).  On Friday, 6/5/15 it closed at $35.12 so five shares would be worth $175.60.  It would be sold just like any other stock on a stock exchange using a brokerage account.


Very good info there a1smith, thanks for taking the time.
I think the certificate will just stay in the drawer for another 26 years given it's current lack of value. It will surely be worth millions by then, just like all the stories I've read about old stock :)

a1smith

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Re: Cashing in old GM stock certificate?
« Reply #13 on: June 12, 2015, 06:30:10 AM »
Very good info there a1smith, thanks for taking the time.
I think the certificate will just stay in the drawer for another 26 years given it's current lack of value. It will surely be worth millions by then, just like all the stories I've read about old stock :)

Your welcome.  Keep the certificate in great condition to maximize the collectible value.  Maybe you can find the DPH and GMH paper certificates also.

nobodyspecial

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Re: Cashing in old GM stock certificate?
« Reply #14 on: June 12, 2015, 01:55:52 PM »
It's not corporate fraud, it is US bankruptcy law.
To-MAY-To  / To-MAH-To


I wouldn't mind a bankruptcy where I get to keep my house, all my goods, all my IP and continue doing the same work - and have the government pay me a bunch of money while it happens.

a1smith

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Re: Cashing in old GM stock certificate?
« Reply #15 on: June 12, 2015, 08:11:33 PM »
It's not corporate fraud, it is US bankruptcy law.
To-MAY-To  / To-MAH-To


I wouldn't mind a bankruptcy where I get to keep my house, all my goods, all my IP and continue doing the same work - and have the government pay me a bunch of money while it happens.

You just described the outcome of a personal Chapter 7 bankruptcy for excessive credit card debt -- those are unsecured loans so they are erased by a Chapter 7 bankruptcy.  You have to keep paying secured loans like mortgage.  You keep your house and everything in it.  Declaring bankruptcy typically doesn't affect your job (directly, that is).  Your 401k and pension are safe.  Then you get a bunch of money (subsidy) from the government to refinance your mortgage under the soon to expire HARP program.

Here is an article you can read - Personal bankruptcy - What you should know

YoungInvestor

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Re: Cashing in old GM stock certificate?
« Reply #16 on: June 13, 2015, 10:09:24 AM »
It's not corporate fraud, it is US bankruptcy law.
To-MAY-To  / To-MAH-To


I wouldn't mind a bankruptcy where I get to keep my house, all my goods, all my IP and continue doing the same work - and have the government pay me a bunch of money while it happens.

Investors lost their money, but the government decided it was worth it to keep the company around rather than let it burn to the ground.

I understand you're unhappy about that loss, but you owned part of a company that became worthless. Someone deciding to fund the thing so that people didn't lose their jobs and IP wasn't loss doesn't affect you past that point.

nobodyspecial

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Re: Cashing in old GM stock certificate?
« Reply #17 on: June 13, 2015, 12:02:22 PM »
It does effect me in that it means that all my "safe" investments are essentially worthless.

Any public company could decide tomorrow to move all it's money offshore, or simply pay the executives a $Bn bonus, declare bankruptcy, wipe out the shareholders and restart the day after with a big taxpayer funded cash injection ?   


rmendpara

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Re: Cashing in old GM stock certificate?
« Reply #18 on: June 13, 2015, 12:49:41 PM »
It does effect me in that it means that all my "safe" investments are essentially worthless.

Any public company could decide tomorrow to move all it's money offshore, or simply pay the executives a $Bn bonus, declare bankruptcy, wipe out the shareholders and restart the day after with a big taxpayer funded cash injection ?   

If you don't trust management, then why would you invest?

forummm

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Re: Cashing in old GM stock certificate?
« Reply #19 on: June 13, 2015, 01:31:07 PM »
It does effect me in that it means that all my "safe" investments are essentially worthless.

Any public company could decide tomorrow to move all it's money offshore, or simply pay the executives a $Bn bonus, declare bankruptcy, wipe out the shareholders and restart the day after with a big taxpayer funded cash injection ?   

Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks. If you want "safe" buy FDIC-insured CDs.

nobodyspecial

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Re: Cashing in old GM stock certificate?
« Reply #20 on: June 13, 2015, 02:58:14 PM »
Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks.
Unless this becomes a standard accounting practice - just like hiding income offshore.

The govt will always bail out a financial institution and they can't let a major defense supplier go bust - so Boeing and Lockheed-Martin can be sure to be bailed out.
Same is true for an oil company, anybody in farming (at least with primaries coming up) and probably anyone in healthcare.
Then the govt needs to support high tech, so Apple could get a few $100Bn out of this, and it can't let an American icon like Disney or Coke disappear.
 
So anyone buying any public listed company large enough to have lobbyists should assume that the company is in a position to make a huge profit from  bankruptcy.

forummm

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Re: Cashing in old GM stock certificate?
« Reply #21 on: June 13, 2015, 05:09:57 PM »
Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks.
Unless this becomes a standard accounting practice - just like hiding income offshore.

The govt will always bail out a financial institution and they can't let a major defense supplier go bust - so Boeing and Lockheed-Martin can be sure to be bailed out.
Same is true for an oil company, anybody in farming (at least with primaries coming up) and probably anyone in healthcare.
Then the govt needs to support high tech, so Apple could get a few $100Bn out of this, and it can't let an American icon like Disney or Coke disappear.
 
So anyone buying any public listed company large enough to have lobbyists should assume that the company is in a position to make a huge profit from  bankruptcy.

??? I don't follow. Your argument seems to be agreeing with me. Stockholders get wiped out, but if the company is "important" for whatever reason, the company is helped to keep operating, and the bondholders have their value mostly retained.

nobodyspecial

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Re: Cashing in old GM stock certificate?
« Reply #22 on: June 13, 2015, 05:23:57 PM »
??? I don't follow. Your argument seems to be agreeing with me. Stockholders get wiped out, but if the company is "important" for whatever reason, the company is helped to keep operating
I probably was. I was just musing that if this is possible once and is advantageous then it will become a standard procedure, and so all equity is devalued to compensate for the risk. Ironically equity in small unimportant companies will be the only kind that is valuable  ;-)

a1smith

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Re: Cashing in old GM stock certificate?
« Reply #23 on: June 13, 2015, 07:14:50 PM »
Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks.
Unless this becomes a standard accounting practice - just like hiding income offshore.

The govt will always bail out a financial institution . . . . . .

Then the govt needs to support high tech . . . . .

Hmmm, wasn't Lehman Brothers a financial institution?  Started investing after 2008?

Solyndra (solar tech) went bankrupt in 2011 after receiving $528M in DOE loans.

Lots of other examples.
« Last Edit: June 13, 2015, 07:30:15 PM by a1smith »

YoungInvestor

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Re: Cashing in old GM stock certificate?
« Reply #24 on: June 13, 2015, 07:20:37 PM »
Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks.
Unless this becomes a standard accounting practice - just like hiding income offshore.

The govt will always bail out a financial institution and they can't let a major defense supplier go bust - so Boeing and Lockheed-Martin can be sure to be bailed out.
Same is true for an oil company, anybody in farming (at least with primaries coming up) and probably anyone in healthcare.
Then the govt needs to support high tech, so Apple could get a few $100Bn out of this, and it can't let an American icon like Disney or Coke disappear.
 
So anyone buying any public listed company large enough to have lobbyists should assume that the company is in a position to make a huge profit from  bankruptcy.

A company's objective is to make more profits for its owners, the shareholders. They're not trying to screw their shareholders, they belong to them.

forummm

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Re: Cashing in old GM stock certificate?
« Reply #25 on: June 13, 2015, 09:08:42 PM »
Owning individual stocks is not "safe". Even a well diversified portfolio isn't "safe", but it's less risky than individual stocks.
Unless this becomes a standard accounting practice - just like hiding income offshore.

The govt will always bail out a financial institution and they can't let a major defense supplier go bust - so Boeing and Lockheed-Martin can be sure to be bailed out.
Same is true for an oil company, anybody in farming (at least with primaries coming up) and probably anyone in healthcare.
Then the govt needs to support high tech, so Apple could get a few $100Bn out of this, and it can't let an American icon like Disney or Coke disappear.
 
So anyone buying any public listed company large enough to have lobbyists should assume that the company is in a position to make a huge profit from  bankruptcy.

A company's objective is to make more profits for its owners, the shareholders. They're not trying to screw their shareholders, they belong to them.

This is generally true. But the motivations of the executives are primarily to enrich themselves and increase their power. The motivations of the board are supposed to be to increase shareholder value. But often they are buddies with the CEO and shovel cash that often appears to be unwarranted to the CEO's pockets (which arguably decreases shareholder value). The limits on shareholder democracy are an issue. Fortunately we haven't seen too much of the extreme activities suggested earlier in the thread (purposefully tanking a company by putting the cash in employee pockets and then getting bailed out by the government). The big banks during the financial crisis are an example where this did happen in one sense (the bank employees weren't trying to bring down the banks, but they also didn't care much about whether that happened since they were getting mega rich regardless).