subscription privilege


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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

References in periodicals archive ?
Also, in conjunction with the rights offering, all of the company's executive officers and outside directors have agreed to purchase shares that are subject to their basic subscription privilege, at the same subscription price offered to shareholders.
7 million shares under the over subscription privilege.
The subscription agent, Bank of New York-Mellon, has informed the Company that of the 2,608,735 shares of common stock to be issued, 1,919,875 are being issued pursuant to the basic subscription privilege and 688,860 are being issued through the over-subscription privilege.
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").
Bank of New York-Mellon, the subscription agent, has reported that of the 2,608,735 shares of common stock to be issued, 1,919,875 are being issued pursuant to the basic subscription privilege and 688,860 are being issued through the over-subscription privilege.
The rights offering includes an over-subscription privilege that entitles a stockholder who exercises all basic subscription privileges in full the right to purchase additional shares of common stock which remain unsubscribed at the expiration of the rights offering, subject to availability and pro rata allocation of shares.
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.