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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 ?
Righter has over 15 years experience in the education field.
I really do have to be righter than right before Tim lets me do a part.
The winning caption for Choose A Title for last week is Sign Righter Required which was sent in by Mr D Booth of Erdington in Birmingham
He's had a bit of a renaissance in recent years and now our patron saint, righter of wrongs and wearer of rather dashing armour is up there alongside other great names in the English hall of fame.
In order to keep up with demand, Butts, and his partner James Brunot, licensed Selchow and Righter to market and distribute the game.
Righter, show the application of negligence and respondent superior theories by the Utah Supreme Court.
The front-runner [hypothesis] until about 5 years ago was that water came from comets and came in late," says Kevin Righter, a planetary geochemist at the University of Arizona in Tucson.
But he was the kind of cowboy every little kid wanted to grow up to be - a straight shooter, respectful of ladies, kind to animals, righter of wrongs.
I always expect ballet dancers to get the movement righter than I can get it.
In dropping the charge that Bishop Walter Righter violated his ordination vow in 1990 when he ordained Barry Stopfel, now a priest in the Newark diocese (NCR, March 22), the court declared that "there is no discipline of the church prohibiting the ordination of a noncelibate homosexual.
We have focused on playground safety since the late 1970s," said Roscoe Righter, department director.
As Tintin (filling in for Hans Castorp, Mann's protagonist) patiently follows the group's heady (to him; prolix to me) discussions about human passion, discord, decadence, and violence, his former career as a freewheeling adventurer and righter of wrongs seems altogether and all too suddenly pointless: "How little I understood the workings of the community I had wished to serve, how less I knew of the human heart, the least known of all, my own.