preemptive right

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Related to Subscription Rights: Pre-Emptive Rights

Preemptive right

Common stockholders' right to anything of value distributed by thecompany.

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.

preemptive right

A stockholder's right to keep a constant percentage of a firm's outstanding stock by being given the first chance to purchase shares in a new stock issue in proportion to the percentage of outstanding shares already held. Not all firms provide the preemptive right, which is more important to stockholders owning a significant part of a company. Also called subscription privilege. Compare privileged subscription. See also special subscription account.
References in periodicals archive ?
Under the distribution, Sears Holdings stockholders will receive one transferable subscription right for each share of Sears Holdings common stock held as of the close of business on the record date, except that holders of Sears Holdings' restricted stock that is unvested as of the record date will receive cash awards in lieu of subscription rights.
Each subscription right will entitle its holder to invest USD0.
Trading in subscription rights will take place from 4 November to 16 November.
Common stockholders will receive one basic subscription right for each common share held as of the record date, which is yet to be determined.
According to the company, shares subscribed for without subscription rights have been allotted in accordance with the principles stated in the prospectus prepared in connection with the new share issue and published on 23 March 2016.
Hellenic Bank is planning to raise its share capital by about 220 million, via an offering of subscription rights to current shareholders.
The company will distribute subscription rights, consisting of a basic subscription right to purchase one Unit per common share held, and an over-subscription right to purchase additional Units.
Upon commencement of the rights offering, the Company will distribute non-transferable subscription rights to purchase shares of its Class A Common Stock to each holder of its Class A Common Stock and Class B Common Stock as of the close of business on June 14, 2010, the record date for the rights offering.
NORDIC BUSINESS REPORT-December 10, 2015-Nickel Mountain's announces last day of trading in subscription rights
5 per cent of all Offer Shares, were subscribed for without subscription rights in the secondary subscription.
NASDAQ: BMTI) announced today that the Company has approved a seven-day extension of the Company's pending subscription rights offering to 5:00 p.
46% of the shares offered have been subscribed for with subscription rights and approximately 1.