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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 ?
Only with God's help can David or any of his successors rule righteously. Psalm 72 spells out this ideal kingship in more detail and also begins with the words: "Give the king your justice, O God, and your righteousness to a king's son." The messianic promise in Isaiah 11:1-5 promises a king who will judge with righteousness and decide with equity for the meek of the earth.
In almost all Hollywood films that pretend to take a moral stance, everybody knows that the filmmakers aren't righteously indignant about the subject matter.
Like all detours, this one took considerably longer than planned, and when I was through, I screened it for the faithful and got righteously drunk and fell in love with everyone who had a kind word to say about the film and swore revenge against all those who muttered noncommittally and then I went to bed knowing it was all over.
Member states, some of them righteously withholding the dues they owed, lectured the U.N.
Worse, it actually abets the lobbying it so righteously denounces.
He argues that the proper moral and ethical response of a person who has been angered by provocation is not to personally inflict retaliatory retribution but to become 'righteously indignant'.
Angry readers demanded righteously that the newspaper drop the "For Better or Worse" comic strip last April because it presented the story of a gay teenager who was revealing his orientation to friends and family.
Then he began to comprehend, especially after his bloody reckoning with Confederate troops at Shiloh, the folly of conciliating opponents who thought of themselves as so righteously superior.
Judges should live sensibly, righteously and godly in the present challenging and trying times.
While we grieve our deep loss and the emptiness in our humble home, we take solace in celebrating a life that was lived simply and righteously; spreading love, joy, good cheer and warmth all around.
Elaborating on Iran's expectation of the Moscow talks, Boroujerdi stated, "Iran righteously expects that the sanctions imposed outside the (UN Security Council) resolutions come to a halt, illegal (UNSC) resolutions be annulled and its nuclear issue be returned to its normal track."