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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 ?
Thus, it is sufficient to define [delta](W, d) in the cases represented in Table 3: the left part of the table is used for the first and last row of the input picture, whereas the right part covers the other rows to be visited rightwards or leftwards.
Since we pooled data across the two lateral directions (in preliminary experiments rightward and leftward directions did not produce different patterns), by increasing the number of repetitions we equated the samples across velocities for the three types of compared motion.
F] and p schedules retreat leftwards and rightwards respectively until the tendencies for unemployment to fall and for inflation to rise are both eliminated.
Schreiner had become even more incapacitated by heart problems than when she wrote her two letters to Miemie Murray extracted above, while South African political life had moved rightwards in a number of consequential ways.
There are numerous signs that Mr Kennedy is moving policy Rightwards.
In this scenario a monetary expansion shifts the AD curve rightwards.
Here the CBO shows a dramatic shift rightwards in terms of the federal workforce.
6b moves rightwards until it crosses the lower bend of the boundary curve (for [Theta] = 0.
Similarly, Enzenberger's shift rightwards in the debate on 'asylum seekers' in the aftermath of the 'Wende' goes unmentioned.
Mr Blair was triumphant but in the last 18 months Mr Canavan has shown he is determined to protest whenever possible at Labour's drift rightwards.
The x axis runs horizontally at right angles to the line joining the middle stumps (coordinates increasing rightwards as seen by the umpire), they axis runs vertically (coordinates increasing upwards), and the z axis runs along the line joining the middle stumps (coordinates increasing away from the umpire).
An understanding of the new definition of right and left means accepting that society's vocabulary has shifted rightwards -- away from government as the finder and funder of solutions to society's ills.