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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
Gray seeks to dismiss both negative and positive rights as indeterminate.
Quite apart from--but often related to--constitutional competence, the question of institutional competence commands strong restraint on positive rights claims.
POL'Y 1 (2010) (arguing that though it is likely the Privileges or Immunities Clause will at some point be welcomed back into modern constitutional jurisprudence, it cannot be manipulated to constitutionalize modern, positive rights).
positive rights clauses that are included in some state constitutions in
(30) Thus, positive right remedies turn on this actioninaction dichotomy, which, in turn, determines whether a court will face prudential concerns in ordering a coordinate branch to adopt a policy that the court has selected.
positive right to water, then they will have little incentive to
At one of the area's most popular new condo developments on Marine Drive, Marcon's Heywood on the Park, investors can buy a one-bedroom and be cash flow positive right away.
The current model is globalisation, with market economics underpinning the valorising of individualism and profit, putting negative rights above positive rights, and injecting compromise in human rights, the rule of law and democracy.
Reproductive justice is a different concept altogether, more akin to the notion of positive rights, where the role of the state (or, at a global level, the international community) is considered to be enabling a woman to live a better life.
Such privileges are called "positive rights," as opposed to the inaptly-named "negative rights" to things that cannot be taken away from you.