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rights offering

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rights offering

noun
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" 
WordNet® 3.0, © 2006 by Princeton University.
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Financial Dictionary

rights offering

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.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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