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Privilege granted shareholders of a corporation to subscribe to shares of a new issue of common stock before it is offered to the public. Such a right, which normally has a life of two to four weeks, is freely transferable and entitles the holder to buy the new common stock below the public offering price. See: Warrant.

Rights Offering

In stock, the ability of a shareholder to maintain the same percentage of ownership in a company should the company issue more stock by buying 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. Rights offerings or issues are also called subscription rights or simply rights. See also: Anti-dilution provision.


A certificate that permits the owner to purchase a certain number of shares, or, frequently, a fractional share of new stock from the issuer at a specific price. Rights are issued to existing stockholders in proportion to the number of shares the stockholders already own. Rights then may be combined with cash to purchase the new shares or they may be sold to other investors. Rights usually have value because they permit the owner to purchase shares of stock at less than the market price. A right is indicated in stock transaction tables by the symbol rt, appearing after the stock's name. Also called stock right, subscription right. See also ex-rights, preemptive right.
Should rights be sold or used?

Rights offerings refer to the right of an investor to maintain his or her percentage ownership in a company when the company decides to issue new stock. Generally the company will do so at a discount to its market price to attract buyers, thus the existing stockholders' rights have value. The decision a rights holder must make is whether to put more money into the stock of this company or to sell the rights in the open market as compensation for the dilution of his or her percentage ownership in the company. TIP: Such a purchase depends completely on the individual's circumstances, goals, prejudices, and objectives—just as in any other stock purchase—and should be approached accordingly.

Thomas J. McAllister, CFP, McAllister Financial Planning, Carmel, IN


The opportunity a corporation gives a shareholder to buy additional shares at a special price for a limited time. Shareholders who don't use their rights can sell them to other investors.
References in periodicals archive ?
So the student next chose point B as the start of the cut, but quickly realised that although she was creating a right angle triangle that could fit in point C and F, it would not result in a square.
Patrick Chaundy, President and CEO of Right Angle Media, said: "Based on extensive research that we have undertaken, we have identified that a vast potential exists in the region for a comprehensive out-of-home media solutions provider.
Jim Davies, Right Angle Media's Director of Operations said "Right Angle Media continues to work at record speed, recently installing 14 shelters in a day.
A cube is a solid in three dimensions, with three mutually perpendicular right angles evident at the vertices.
A new line of Right Angle Mounting Plates from Techno, Inc.
Mill-Max has added right angle options to its line of .
A wide range standardized accessories offers solutions for operations such as vertical milling, sawing, facing, groove cutting and right angle operations.
and Joannopoulos and other MIT researchers describe bending millimeter-wavelength light through a right angle in just one wavelength.
Nasdaq:NSYS), a global leader in the supply and manufacturing of Machine Vision analog and digital video cables and assemblies based in the United States, introduces Right and Left Angle orientations for Right Angle Camera Link cable assemblies.
The new 4" diameter single phase motors have now been mated to the company's 750 Series right angle gearing to offer up to 104 in-lbs (11.
In addition, the catalog features a large selection of motors, gearmotors, right angle drives and speed reducers.
At the heart of this approach is the Finn-Power hydraulic turret punch press and integrated right angle shear to which are added raw sheet storage, load/unload, and parts sorting and stacking as needed.