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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 ?
One dug up a disgruntled woman so righteously indignant and certain she knew "the truth" of what happened that she bragged that if she'd been one of them, she'd have held out for conviction and made it a hung jury.
There are those who righteously spread unconfirmed hearsay, whether it be true or not, about this footballer or that actor from the apparent security of an anonymous account on Twitter and many others who gleefully accept it as fact.
This orientation ultimately leads the author to conclude that (1) criminals cannot righteously object to being punished because, in wronging others, they forfeit their rights not to be punished, and that (2) the state violates no rights in assuming exclusive control over the punitive process only because it is uniquely capable of adequately realizing the morally significant aims that a system of punishment can achieve.
Al Mubarak underscored that questioning of ministers is a constitutional tool but must be used righteously without lurking and waiting for ministers to commit mistakes or abuse this privilege.
Hawazen Esber, CEO of Bena Properties, said: "Our strategy was to inaugurate our brand with a hospitality project that righteously reflects our vision to become Syria's most renowned real estate investment and development company.
Keep the kiddies at home and enjoy some "subversive, ridiculous, sublime, controversial, lovely, righteously political" puppetry.
I think Dole and Minute Maid would get righteously defensive about not being considered "prominent brands" by a design guru at Tropicana, and there is another reason for the brouhaha that may be more important.
Last year he nibbled at the edges of mainstream popularity with a righteously angry and delightfully funky anti-war album, Yell Fire.
CARDIFF County Council has a policy of self righteously calling on the public to act responsibly with regard to recycling their rubbish.
Then I realized I am prone to righteously dangerous anger against various stripes of nitwits.
Human resources people righteously assert that diversity enhances their company's ability to serve others and strengthen the global economy for everyone's benefit.
However, reliving those good old days came to a disturbing halt, as I became righteously disgusted by Mr.