rights offering investment & finance definition
The
sale of shares of stock to existing shareholders at a dis-counted price from
what the general public will have to pay. Seen more frequently in the U.K. than
in the U.S.
See rights offering in Wall Street Words
The distribution to existing owners of rights to purchase shares of stock as part of a new stock offering. A company uses a rights offering when it sells new shares to existing shareholders rather than selling new shares to the entire investment community. The rights are used as a means to distribute new shares to existing holders on the basis of the shares each holder already owns. See also
oversubscription privilege,
preemptive right.
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