What Were Guilder Shares?

What Were Guilder Shares?

Let me explain what a Guilder share was: it was essentially an ownership stake in a Dutch company that you could trade right here in the United States, representing shares that had been canceled on Dutch stock markets.

These Guilder Shares, which some people also called New York Shares, were part of a unique international trading setup just for companies based in the Netherlands. Back then, Dutch company stocks couldn't be handled through American Depositary Receipts (ADRs). But things have changed—now ADRs can be issued for Dutch companies, so Guilder Shares aren't used anymore.

Key Takeaways

Here's what you need to know: Guilder Shares gave Dutch companies a path to list their shares on the New York Stock Exchange (NYSE). In the past, Holland had rules that stopped shares listed on its national exchanges from being traded abroad. Known as New York Shares too, a Guilder Share let a Dutch company cancel its shares on Netherlands exchanges and relist them directly on the NYSE.

Understanding Guilder Shares

When you're looking to buy shares in a foreign company as a U.S. citizen, you typically go for an ADR, which is a certificate representing those foreign shares.

But the Netherlands didn't allow Dutch company stock to trade in other countries, so to make it work, a set number of shares had to be canceled in the Netherlands, then bundled and sold as Guilder Shares that could be issued in the U.S.

Fast Fact

Just so you know, the guilder was also the name of the Dutch national currency before they switched to the euro.

Dutch ADRs Today

An American Depositary Receipt (ADR) is a negotiable certificate from a U.S. depositary bank that represents a specific number of shares—usually one—of a foreign company's stock. It trades on U.S. stock markets just like any domestic share would.

ADRs let U.S. investors buy into overseas companies that wouldn't otherwise be accessible. For foreign firms, it's a win because they can draw in American investors and capital without the full hassle and cost of listing directly on U.S. exchanges.

These days, you can trade several Dutch ADRs on U.S. exchanges, with even more available over-the-counter (OTC). The ones on major exchanges include the following.