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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 ?
48 thousand right-hand drive cars were imported to Kyrgyzstan only in 2014.
For example, knowing the structural importance of the right-hand F-sharp in measure 2 might compel the student to take a little time on that note, expressively pulling against its short note value.
Since import of right-hand drive vehicles was prohibited by Customs Union countries, we should do so too, otherwise it will conflict with requirements.
The subsidiary stated that it is committed to extending its reach in the European market, and will eventually offer the model as a right-hand drive model.
Jennifer Hudson wore a brown diamond right-hand ring and 32-carat diamond necklace from Fred Leighton, while Jada Pinkett Smith sported her right-hand diamond ring with $1 million diamond stud earrings from H.
Teaching points: When 1 throws the outlet to the right, 2 will shoot a right-hand layup.
In addition to Wrangler, we recently introduced a right-hand drive Chrysler Neon to complement the right-hand drive Jeep Grand Cherokee and Jeep Cherokee, which was the first right-hand drive vehicle built in the U.
The student, in this instance, would concentrate primarily on hearing the right-hand melody/filigree in groups of fourteen and thirteen notes.
To produce Voltz, some equipment had to be modified to accommodate the right-hand drive configuration, notably in the assembly and functional inspection areas.
Auto Business News-20 August 2009-Chrysler to produce right-hand drive diesel minivans in Canada(C)2009 ENPublishing - http://www.