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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 ?
They realized that "their" issues and "gay" issues were all of a piece where the right was concerned--and that, therefore, a solid strategy for countering the right wing's opportunistic coalition required bold support for the "identity politics agenda." The right wing withered in Vermont after its enormous defeat.
In all Right Wing won three of his six starts this year, but on his final outing at Newmarket last month he trailed in last with his rider, Kieren Fallon, reporting that he "showed no interest throughout the race".
One senior Tory MSP said: "Adrian Shinwell is disgusted at the right wing clawing after more and more power.
Richard Quinn, Right Wing's partner in last year's Lincoln, will be unavailable as he is on duty at the World Cup meeting in Dubai, so Pat Eddery is booked.
Right Wing has to be delivered with a last-minute challenge and Quinny did the job to perfection on the 9-2 favourite who had been twice that price with some bookies in the morning.
The National Council of Bulgaria's right wing Union of Democratic Forces (UDF) will vote Tuesday on a confidence motion requested by UDF Chair and Blue Coalition Co-Chair Martin Dimitrov.
Air Force--impacted terrain following an in-flight separation of the right wing. The commercial pilot and two pilot-rated crewmembers were killed.
The terms "race riot", "right wing", "fascists" and "BNP" have been banded about.
My favorite cannon lobs from the right wing have included the notion that the film besmirches the fine and noble tradition of the Western movie.
RIGHT WING completed his rise from Lincoln winner to Pattern-race performer when the seven-year-old belied his years to capture the Group 3 Earl of Sefton Stakes yesterday.
The combination of these groups, together with the Catholic pro-life organizations, are loosely known as the religious right wing. These individuals and groups are represented formally or informally by such organizations as the Council on National Policy, the Christian Coalition, and organizations founded by Catholic right-wing leader Paul Weyrich: the Heritage Foundation and the Free Congress Foundation.