Goldbrick Shares

DEFINITION of 'Goldbrick Shares'

Stock in a company that appears to be worth more than it really is. It bears the surface front of quality and worth, but is in fact worth very little. This term can be compared to painting a worthless brick gold and proceeding to sell it as a real gold bar.

BREAKING DOWN 'Goldbrick Shares'

Although goldbrick shares tend to connote a fraudulent or otherwise disreputable company, this is not always the case. Often, during times of market euphoria, the value of certain goods and services get overly inflated - witness the dot-com boom of the late 1990s. When this happens, it's possible to see shares in perfectly legitimate businesses become goldbrick shares when the hysteria wanes.

One reason the term "goldbrick shares" has such a negative connotation is because the act of gold bricking was originally an old miners' trick, in which part of a brick was solid gold, while the rest was merely coated in gold, giving the appearance of much greater worth. Just like those bricks of yore, however, one can avoid getting stuck with goldbrick shares by doing the proper due-diligence.