oversubscription privilege

Oversubscription privilege

In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not taken up.

Oversubscription Privilege

In a new issue of a stock, the right of current shareholders to receive or purchase the rights or warrants to the new issue at a discount. This allows existing shareholders to maintain their current percentage of ownership in the company. The rights or warrants that are distributed are the rights some shareholders did not want to receive. Thus, these remaining rights or warrants are distributed among existing shareholders on a prorated basis. See also: Anti-dilution provision.

oversubscription privilege

The opportunity to purchase, on a pro rata basis, any remaining shares not already subscribed to in a new stock offering. In a typical new offering using stock rights, new shares are priced below the market price in order to ensure a successful sale. Generally, however, some stockholders will neither use nor sell their rights to buy the new shares, thus leaving some stock unsold even at the bargain price. The issuer therefore allows the stockholders to oversubscribe in anticipation of extra available shares. It is generally in the stockholder's interest to use the oversubscription privilege. Compare subscription price.
References in periodicals archive ?
Gyrodyne's subscription agent, of the previously announced preliminary results that a total of 7,044,894 shares were subscribed for in the rights offering, consisting of 1,009,376 shares under the basic subscription privilege and 6,035,518 shares under the oversubscription privilege.
2 percent of the total number of shares requested pursuant to holders' oversubscription privilege.
This means that each rightsholder who properly exercised its oversubscription privilege was allocated for oversubscription up to approximately 3.
Gyrodyne's subscription agent, indicate that a total of 7,044,894 shares were subscribed for in the rights offering, consisting of 1,009,376 shares under the basic subscription privilege and 6,035,518 shares under the oversubscription privilege.
In addition each shareholder was entitled to an oversubscription privilege up to a limit of three times their basic subscription right.
99, for one share of Series A Liberty Ventures common stock pursuant to a basic subscription privilege, and also entitles the holder to subscribe for additional shares of Series A Liberty Ventures common stock pursuant to an oversubscription privilege.
Rights acquired in the secondary market may not participate in the oversubscription privilege.
Since only 16,382,984 shares were available for purchase pursuant to the oversubscription privilege, those persons who exercised their oversubscription privilege received their pro rata allotment of the 16,382,984 shares eligible for purchase based on the number of shares issued to them under their basic subscription privilege.
Of the 22,372,616 shares of common stock purchased, 16,305,144 were purchased under the basic subscription right and 6,067,472 were purchased through the oversubscription privilege.
If you requested and paid for more shares of common stock than are allocated to you pursuant to your oversubscription privilege, Biglari Holdings will refund that overpayment, without interest.
The maximum number of shares that a shareholder may purchase under this oversubscription privilege is equal to the number of shares such shareholder purchased under its basic subscription privilege, subject to pro-rata allotment.
The rights offering includes an oversubscription privilege which permits each rights holder that exercises its rights in full to purchase additional shares of common stock that remain unsubscribed at the expiration of the offering.