Collectors treasure dot-com stock notes

Insight on the News, August 12, 2002 by John Elvin

These are perilous times for most investors, but one group of buyers actually is having a field day. Their particular field is scripophily, the collection of financial paper--in this case, stock certificates. At the moment, an expert tells us, there's quite an interest among collectors in defunct dot-com certificates and other currently controversial stocks such as those of Enron Corp.

Scripophily? What kind of a word is that, anyway? "The term comes from `scrip,' having to do with ownership of paper, and the `ophily' derives from a Greek word for `love,' so it's the love of collecting paper," says Bob Kirstein, a leading purveyor of collectible stocks and bonds who conducts electronic business at www.scripophily.net. He also operates a specialty store in Falls Church, Va.

While the field does keep otherwise worthless stocks alive, it is as subject to peaks and valleys as the issuing firms. The Enron certificate was bringing as much as $100 on the eBay Internet auction Website last December. But more recently Enron certificates were selling in the $25 to $45 range, with those beating a printed signature of former Enron chief executive Kenneth Lay being the most sought after.

The list of defunct or seriously wounded dot-com stock certificates now considered collectible is, of course, quite lengthy. One example would be Excite@Home, a merger that filed for bankruptcy; its paper sold for as much as $120 but now is in the $60 range. Another is drkoop.com, a barely surviving casualty associated with former U.S. surgeon-general C. Everett Koop, with certificates now selling in the $35 range.

And what exactly is the attraction of this otherwise worthless paper? "It's a piece of history," Kirstein says. "There are people who want it for a reminder about bad investments, and a memento of good investments. There's not any one thing. Some like the picture adorning it or they buy it because their father worked there or for some other nostalgic interest. There's no one mason. There's also an overlap with the autograph market. In that regard, Kirstein mentioned a currently popular certificate signed by Prescott Bush, the grandfather of President George W. Bush.

What should one do if interested in collecting stock and bond certificates? "If I was starting out, I'd start with companies people are talking about," Kirstein says, comparing recent financial debacles to the historic Dutch tulip bubble of the 17th century, or the infamous Mississippi and South Sea bubbles. "These are very historic times," he believes.

There are many angles or niches open to the collector. "One particular type of collectible that will probably be sought in years to come would be certificates showing the World Trade Center," Kirstein notes. Companies with stocks featuring the towers include Merrill Lynch and ConEdison. As a parting thought, Kirstein recommends that buyers deal with reputable firms; even in a field devoted to seemingly worthless paper, there are fakes.

(Many thanks to Kristin Aguilera, editor of Financial History, the magazine of the Museum of American Financial History located in New York City, for suggesting Kirstein as a source for this item.)