Right

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Right

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.

right

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

Right

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 ?
The put rights allow investors to sell shares back to the company on 15 November 2011 at the lower of USD5.75 or the estimated economic NAV per share on 31 October 2011.
Now he will put right what has gone wrong by listening and acting.
"The key is that these issues can be put right and we now have clear action plans in hand.
Research from insurer LV= shows buyers are having to shell out thousands to fix hidden horrors they - missed during buying PS- costing an average PS4,205 to put right.
Long term water damage can cost hundreds of pounds to put right, so protect your home with Leak Stop.
"People want to put right an injustice because Fred Keenor was a giant.
CHELSEA have vowed to put right their recent mistakes and get their campaign back on track with FA Cup victory at Southend tomorrow night.
"But rather than beat myself up about it I will try and put right where I went wrong and have another go in Israel next August."
WREXHAM striker Michael Proctor is determined to put right the wrongs of last season and help guide the Dragons back into the Football League.
However, the hosts don't have the best of records against the Addicks and have failed to win in any of their last four league meetings, something Aidy Boothroyd will be keen for his players to put right, and if the home side can rediscover their best form then they have a chance of beating the visitors.
But let nothing delay council attempts to put right the great visual damage already done.