Sunday, July 26, 2009

About Cancellations

The issuing company always cancels stocks that have been sold, and then redeemed at the prevailing market value at the time of sale. This is done to prevent the certificates from inadvertently being redeemed again through accident, theft, or other fraud.

Cancellations come in a variety of forms. Early cancellations often were large, dark, and obtrusive lines through the body of the certificate. These crude and effective cancellations, often large “X’s”, were unsightly, but they definitely accomplished their assigned task. These gave way to pen lines through the actual signatures of company officials appearing on the stocks, sometimes of famous individuals. The negative effects of this practice are ameliorated somewhat; however, by the fact that these pen lines provide valuable signatures of famous people. This is the only way some signatures are available.

Ink cancellations gave way to a variety of machined cancels such as hole punches, pinholes, and others. Punches of various shapes and sizes either shredded a portion of the certificate or actually punched out pieces of paper in the shapes of stars, diamonds, hearts, and the like.

Last, but not least, was the use of the word “cancel” or “cancelled” that was either written, stamped, or punched across the face of the certificate. No interpretation is needed to understand the meaning.

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