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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 ?
According to Scripture, government officials rule rightly as servants of something higher than themselves.
Focus group participants, the study notes, "came with spirited energy, eager to help build a strong church that will serve spiritual needs today and into the future." This expression of, as the Environics writer puts it, "joy, enthusiasm, hope and vision" will eventually wend its way to General Synod and synod members in 2004 can rightly take pride in being part of a community that engenders such feelings.
But Kieckhefer rightly justifies this enterprise because there were many such manuscripts, and this one, which is relatively complete, can teach us about certain elements of clerical culture in the late Middle Ages.
She ran home and told her mother Helen what had happened and Helen quite rightly demanded an apology.
The Treasury led the effort to reject the initial German-sponsored candidate, Caio Koch-Weser (some Europeans claim, rightly or wrongly, this is because Treasury Secretary Lawrence Summers, while in an earlier stint at the World Bank, engaged in a brutal conflict with Koch-Weser's wife, a strict environmentalist and head of the World Bank's environmental unit).
Werner quite rightly praises Robert Stepto's paradigm of ascent/immersion in African American letters (articulated in the landmark book From Behind the Veil) and selects it as a corollary to his own pairing of terms, linking ascent with modernism and immersion with Afrocentrism.
In pressing full emancipation, the government was appealing to liberal opinion, whom it rightly suspected would be unhappy with its rejection of constitutional and national projects of 1848.
Reeves says Kennedy would have been better off using the Eisenhower decision-making system, which rightly required all the national security officials to be consulted, but wrongly excluded anyone outside that loop.
FORMER interior minister Chaudhry Nisar Ali Khan rightly claimed in his statement that non-cooperation and stubbornness on the part of India halted the Mumbai attack case to come to its logical end.
Secure borders are rightly a key concern for people.
As Branch padre, Reverend David Raine, said: "The association only has 10 members left and of those only three are active, so they decided they would lay up their standard before they're laid up themselves," Quite rightly there was pomp and ceremony at the emotional event.
Of course there are some decisions which, if we had the opportunity to take them again, we might rethink, but Middlesbrough is a town which, while rightly proud of its history and heritage, has its eye firmly on the future.