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A temporary document that represents a portion of a share of stock, often issued after a stock split or spin-off.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


1. A private sector substitute for currency. Historically, scrip was used in logging and mining communities dominated by a single company, and employees had to buy goods from the company store. Presently, it is more closely associated with gift certificates, gift cards, and re-loadable debit cards. Militaries also occasionally pay soldiers in scrip when they are on deployment. In Australia, buyout offers including stock in place of or in addition to cash are known as scrip bids. See also: Money.

2. An IOU from a publicly-traded company that is short on cash. Such a company pays dividends in scrip until it resolves its liquidity problems.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A certificate that can be exchanged for a fractional share of stock. Scrip is distributed as the result of a spinoff, a stock dividend, or a stock split in which the stockholder would be entitled to a fractional share of stock. For example, the owner of a single share would receive scrip for one-half a share in the event the issuer declared a three-for-two stock split.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


Scrip is a certificate or receipt that represents something of value but has no intrinsic value. What's essential is that the issuer and the recipient must agree on the value that the scrip represents.

For example, in the past, after a corporate stock split or spin-off, a company might issue scrip representing a fractional share of stock for each share you owned. On or before a specific date, you could combine the certificates and convert the value they represented into full shares.

But most companies today make a cash payment for fractional shares based on the closing price of the stock on a specific date.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Under its provincial lands legislation, Alberta passed a series of regulations in 1935, affirming that "[p]ermission to locate land scrip will be granted to the half-breed to whom such scrip was issued, providing the claim to the scrip was based on birth within the territory now comprising the province of Alberta." (138) Saskatchewan followed suit by amending the Provincial Lands Act to require that claimants be born in the province and present their claims prior to 1 May 1940 for lands open for homesteading.
However, Gray proffered the following opinion: "It is possibly arguable that the restriction of the right to locate land scrip to persons born in the Province of Alberta may be in contravention of the Transfer of Natural Resources Agreement, but I doubt if such an argument would be given effect to." (142) Unfortunately, Gray provided no reasons in his letter for his opinion.
With respect to the legal rights of scrip-holders after the NRTAs, Cohoon opined that: it is scarcely necessary to point out that the legal holder or grantee of a half-breed land scrip is in a less favourable position to a considerable degree with administration of the resources resting with the respective Prairie Provinces then he was during the time the lands were controlled by the Dominion....
The state eventually re-repudiated these liabilities by "scaling" them to the specie value that their issue had brought the republic and then offering for them (at their scaled values) land scrip worth only fifteen cents specie value per dollar of face value.