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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 ?
Jackson, for example, appears to be committed to a version of prospectivism according to which rightness depends on actual beliefs, reasonable probability estimates and the true account of value.
Rightness, supra note 3, at 1236, 1238 nn.62-63, 65 & 1241 n.75.
We should accept a "not in charge" identity that does not make our rightness contingent on others' wrongness.
Justice is the principle of moral rightness. The state of Mississippi was not honorable or fair in its dealings with the accused.
Alan Scot Willis presents an honest, balanced, and forthright account of how the Southern Baptist hierarchy tried to persuade their congregations and pastors of the rightness and biblical correctness of an integrated society.
The problem comes when the breakup is accompanied by conflicts over territory and resources - conflicts which are often rooted in a web of historical claims which leaves each group deeply convinced of the rightness of its position.
We need to become confident in the rightness of our ideas, firm in our resolve, creative and determined in our social action, and unabashedly subversive of entrenched power whenever it works against our values (including those values we share with our religious friends).
It has the same BMW feeling of quality and rightness about it: the sort of involvement and feedback that makes you want to drive it and take pleasure even from short journeys to the shops.
Many of us feel it's our duty to champion rightness even when it comes to unimportant issues or facts.
It is formal, highly structured, and complex; however, it has a simplicity to it, a sense of rightness and inevitability that makes the work just seem to flow.
Even in these days of women's liberation, it is not unusual for a woman to have questions about the "rightness" of her body.
For them, the discovery of mass graves, the opening of the torture chambers, the discovery that Saddam sent his son to clean out the Central Bank in March are more than enough to convince them of the moral rightness of toppling the dictator.