Wallpaper refers to stocks, bonds, and other securities that have lost all economic value. The term dates back to when these financial instruments existed as physical paper certificates rather than digital records. Even today, the term denotes stock or bond certificates that have become worthless, usually due to events like bankruptcy.
Key Takeaways
- Wallpaper is a colloquial term for securities that have lost all market value.
- The term originated when stocks and bonds were issued as physical certificates.
- Historical events like the Great Depression saw people using worthless stock certificates as actual wallpaper for their homes.
Understanding Wallpaper
The term “wallpaper” implies that these certificates have become so worthless that you might as well use them to paper your walls. This was more than just figurative speech during the Great Depression, following the Stock Market Crash of 1929. Back then, paper certificates represented ownership of company shares.
On Black Thursday (October 24, 1929), the stock market collapse wiped out $30 billion in wealth, leaving many investors with worthless paper certificates. During this tragic period, some people did actually use these valueless certificates to cover their walls, using them as insulation.
Nowadays, “wallpaper” is a term used for any security that has lost all its value, although there’s no longer a practical repurposing of these modern digital records.
Modern-Day Examples of Wallpaper
Examples of wallpaper stocks from more recent times include companies that failed during the dotcom bubble burst (March 2000 to October 2002) and the Great Recession of the late 2000s to early 2010s. Notable examples include online retailers like Pets.com and Webvan from the dotcom era, and Lehman Brothers during the Great Recession.
Collectible Wallpaper
Interestingly, old securities certificates have found a new life as collectibles. Some collectors are willing to pay thousands of dollars for these certificates, particularly those considered quality artwork, bearing popular images, featuring notable signatures, or issued by prominent companies or governments. For instance, a rare Confederate States of America $1,000 bond or an 1887 stock certificate from Chadborn & Coldwell Manufacturing Co. (later Toro Co.) with a vignette of a boy mowing a lawn can be worth about $2,500. This hobby of collecting outdated or worthless “wallpaper” stock and bond certificates is known as scripophily.
Special Considerations
If you possess old stock certificates, don’t automatically assume they have no value. Years of mergers, acquisitions, name changes, and stock splits may mean these certificates hold more worth than you realize. They could still be valuable as tradable securities or as collectibles. Remember, “One person’s junk may be another person’s treasure.”
Disclaimer
The information presented here is for educational purposes only and does not constitute tax, investment, or financial advice. Investing involves risks, including the possible loss of all principal invested.
Related Terms: worthless securities, bankruptcy, scripophily, stock certificates, dotcom bubble.
