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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 ?
If a walk has an obvious trend to move rightward, its SRR measure tends to be positive, while a walk to move leftward provides a negative SRR measure.
Rightward Bound is an outstanding addition to the literature on the politics and culture of the 1970s and an absorbing read in the bargain.
Romney has drifted rightward in his positions on abortion and gay rights, and he seems caught on the horns of a religious dilemma.
The rightward drift of both Catholic and Protestant churches during the past 40 years has left an enormous number of Americans with the feeling that their church doesn't speak for them.
of Chicago in 2000 in a stock swap to avoid capital gains taxes, the paper has been spiraling rightward and downward toward mediocrity.
The vehicle apparently failed to follow a rightward curve on the expressway at the site of the accident, which took place at around 6 a.m.
With the takeover of the Republican Party by the fundamentalist religious right in the early '90s, coupled with the skittishness of Democrats to stand in clear opposition, the center naturally drifted rightward.
As you move rightward along the curve, the number of products sold slopes down, eventually forming a "tail." The result is a "hit-driven economy" and a "hit-driven culture" in which producers seek to make money by pushing a few blockbuster items on consumers.
In the RL-reversed condition, rightward movement of a subject's hand in the work space appeared leftward on the screen and leftward movement appeared rightward.
The advisory board of Stetson's BLP also has a distinctly rightward flit, featuring conservative Christians such as Mary Ann Glendon, Os Guinness and George Gallup Jr.
Unlike my fellow countryman Christopher Hitchens, however, whose break with erstwhile comrades on the left over foreign policy has resulted in a wholesale swing rightward, I still hope that my rethinking of some foreign policy questions can be incorporated into a vibrant progressive movement.