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How to Buy a Single Share of Stock Certificate
Posted By Jim On 03/16/2010 @ 12:03 pm In Investing | 26 Comments
When GM was knocking on the doorstep of bankruptcy (who answered soon after), I thought it would be fun to try to buy a single share as a collectors item. It was under a dollar a share and I really only needed one, so I assumed it probably wasn’t going to cost all that much.
As I started to do more research on stock certificates, I finally understood why prices for stock trades had fallen so much in the last twenty years. The process for buying a certificate isn’t difficult, it just takes a bit of time, and there are a few options out there. Some of which are actually quite pricey, relative to the price of GM at the time (eighty five cents).
Did you know there’s a name for the “study and collection of stocks and bonds?” It’s scripophily and it’s a specialized field of numismatics, which is study and collection of currency. It’s appeal is in intricate designs and engravings of some stock certificates (and sometimes because of the signatures on the certificates, like John D. Rockefeller of Standard Oil Company).
Whenever you buy stocks through a broker, they’re usually registered in “street name.” The street name is the name of your broker and this facilitates the buying and selling of stocks on the open market. For example, if I were to buy a share of Coca-Cola, TradeKing  take my money and buy the shares. They would buy the shares in their name and Coca Cola would recognize them as the shareholder, they would not know who I was. When Coca Cola pays out dividends, TradeKing sends them my way. When Coca Cola requests a vote, TradeKing sends me the proxy.
If you want the shares, you will need to employ the services of a transfer agent . Each company works with a transfer agent to issue shares of stock, you will need to work with one to get a stock certificate issued in your name. You can do this by buying shares through a company that will interact with transfer agents on your behalf (like OneShare ), or you can do it yourself by either buying directly with a transfer agent or through a broker.
You will need to track down the transfer agent for the company whose shares you want. You can usually find this information in their Investor Relations section or anywhere they share their direct investment/purchase plans. For example, if you want to buy shares of American Express, you need to work with The Bank of New York Mellon and their BuyDIRECT program . Once you make a purchase, you can request that they mail you a physical stock certificate.
As I mentioned earlier, if you buy stock through a broker it will be registered in street name. After you’ve made the purchase, you need to contact your broker to find out how to get the shares transfered to the transfer agent for the company. Once you’ve made the transfer to a transfer agent, the process is the same as working through a transfer agent.
It comes down to why you want the physical certificates, since there is no financial benefit to having the paper certificates (in fact, it makes them more illiquid since you have to send them back in if you want to sell it). If you’re buying it to collect, you may want to go with a service like OneShare because then you can have it framed, not folded, and shipped in a way that preserves it’s condition (but it’s not cheap!). If you want the cheapest option, it’s probably cheapest to buy it directly from the transfer agent and have it mailed to you. You can get a nice frame from a local crafts store and still end up with a nice little keepsake.
Of, if having an actual legitimate certificate isn’t that important, nothing stops you from just searching for and printing out a high quality scan of a certificate.
I never did buy those shares of General Motors but I think I saved myself the 85 cents.
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 TradeKing: http://www.bargaineering.com/articles/r/tradeking.php?tag=StockCert
 transfer agent: http://www.sec.gov/answers/transferagent.htm
 OneShare: http://www.oneshare.com/
 BuyDIRECT program: https://vault.melloninvestor.com/jsp/enroll/plans/AmericanExpress/index.html?FILETYPE=HTML&PLANTYPE=DSPP
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