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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 ?
In addition, documents specifying the terms, conditions and procedures for exercising the Put Right will be available through the Depository Trust Company and the paying agent, which is The Bank of New York.
Serious faults are difficult to identify and can be costly to put right.
The only occasion there has been previous contact was over a gig I did in Germany with my trio, and again, the venue advertised ELO against our instruction, and this was put right immediately.
TITLE challengers Real Madrid will attempt to put right one of last season's wrongs, as they bid to keep pace with rivals Barcelona and Atletico.
We know it's something we have to put right, to improve, and I'm sure it will come.
campaign and call on the Government to put right this clear inequality.
And they vowed that damage to the park off Laburnum Grove will be put right very quickly.
But in terms of dealing with those things that have to be put right nationally, that's my role.
At any time after Ryan has acquired its interest in the property and prior to June 30, 2013, Ryan shall be entitled to transfer such interest back to Castillian (the Put Right ) in consideration of the issuance to Ryan of that number of shares of Castillian (each, a Castillian Share ) that is equal to the quotient obtained by dividing (a) the sum of all expenditures incurred or deemed to have been incurred on the property by Ryan to the date of exercise of the Put Right, by (b) $0.
Publicly-owned diesel vehicles in South Wales have been filled with petrol on 27 occasions by forgetful staff since April 2008, costing pounds 4,905 to put right, according to figures released under the Freedom of Information Act.
Islamabad, Jun 26 (ANI): Home Minister P Chidambaram today said that the upside down display of the Indian flag during his meeting with Pakistani counterpart Rehman Malik is a minor issue, and added that the flag was put right after the fault was pointed out.