Rights Issue (Noun)
Meaning
An offering of common stock to existing shareholders who hold subscription rights or pre-emptive rights that entitle them to buy newly issued shares at a discount from the price at which they will be offered to the public later; "the investment banker who handles a rights offering usually agrees to buy any shares not bought by shareholders".
Classification
Nouns denoting communicative processes and contents.
Examples
- Investors can utilize the rights issue as an opportunity to increase their stake in the company at a reduced rate.
- In the context of corporate finance, a rights issue is most beneficial during significant financial downturns.
- The current rights issue is designed to allow existing shareholders to purchase the new shares before the company offers them to the general public.
- Investment bankers handle the rights issues process by managing shareholder subscriptions and potentially buying back unclaimed shares.
- During a rights issue, investors who already hold shares in the company can exercise their subscription rights.