Stock certificates are headed for extinction because they’re expensive to produce and complicated to handle. But there are other ways that a company’s certificates can be pulled out of circulation.
One such circumstance? Bankruptcy.
Over the past two weeks, members of President Obama’s task force have met with GM officials concerning organized, “surgical” bankruptcy. This fallback solution — for use if GM is unable to reach agreements with bond holders and the United Automobile Workers union — would help GM work through bankruptcy quickly and efficiently, so that negative effects on the GM brand are kept to a minimum.
What does this mean for GM’s stock certificates? Once GM restructures, they may adopt a new stock ticker symbol. Normally, they’d then issue a new certificate. Historically, this has meant a redesign of the certificate artwork. This time around, we believe that GM will opt not to issue a new certificate at all; instead, they’ll move directly to 100% digital recordkeeping, as many companies are about to do as I type this entry.
So if you’re a member of the GM faithful, pick up your official GM stock certificate before June 1st.
We’ll be monitoring the GM story as it continutes to develop. Meanwhile, NYTimes.com has full coverage of the Treasury’s bankruptcy request.
Tags: bankruptcy, computershare, extinction, gm, stock certificates, treasury
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