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Subscription Privilege

   Also found in: Dictionary/thesaurus, Legal 0.01 sec.
Subscription privilege
The right of current shareholders of a corporation to buy newly issued shares before they are available to the public.

Preemptive Right
In stock, the ability of a shareholder to maintain the same percentage of ownership in a company should the company issue more stock by subscribing to a proportional number of shares at or below the market price. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. The purchase of this proportional number of shares usually takes place before the new issue is offered to the secondary market, and must be exercised before a certain date (known as the expiration date) if the shareholder is to maintain the same percentage of ownership. It is also called a subscription right. See also: Anti-dilution provision.

subscription privilege


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The preliminary results indicate that the offering has been over-subscribed and, accordingly, the Company will issue a total of 2,000,000 shares to stockholders that exercised their basic subscription privileges and their over-subscription privileges.
The proposed rights offering will also include an over-subscription privilege which will entitle each rights holder that exercises all of its basic subscription privilege in full to purchase any shares not purchased by other stockholders pursuant to their basic subscription privilege at the same subscription price per share that applies to the basic subscription privilege (the "over-subscription privilege").
Pursuant to an over-subscription privilege, each rights holder that exercises its basic subscription privilege in full could also subscribe for additional shares at the same subscription price per share, to the extent that other stockholders do not exercise their subscription rights in full.
 
 
 
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