Preemptive Right

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Preemptive Right

The privilege of a stockholder to maintain a proportionate share of the ownership of a corporation by purchasing a proportionate share of any new stock issues.

In most jurisdictions, an existing stockholder has the right to buy additional shares of a new issue to preserve Equity before others have a right to purchase shares of the new issue.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

preemptive right

n. the right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder. (See: corporation, stock)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
In addition, First Gen's liquidity position has been enhanced by a PHP15bn stock rights offering which was concluded last January 2010.
Reasonable valuation method: Notice 2006-4 (5) addresses concerns that, although stock rights may have been intended to be granted at FMV, the issuers may not be able to demonstrate that the exercise price was determined using a reasonable valuation method in accordance with Notice 2005-1 or the proposed regulations.
Example 1: An investor owns stock in a company and receives a distribution of stock rights to purchase additional shares at $36 per share.
Does Section 409A apply to stock options, restricted stock, stock appreciation rights ("SARs") and puts/calls (together, "Stock Rights")?
"Poison pills" are contingent stock rights that are incorporated into a stock certificate or distributed as a dividend, which serve to enable a corporation to defend itself against an unsolicited tender offer.
In March last year, the PSE was able to bring down the brokers' ownership to about 21.71 percent, shortly after listing its 11.5 million shares in stock rights offer to existing shareholders, a measure intended to pull down brokers' ownership to the minimum requirement.
Those cash were previously raised from its stock rights offering (SRO) activity.
M2 EQUITYBITES-April 6, 2017-Trinity Place declares final results of 1.9m common stock rights offering at USD7.50 per share
Philippines-based Metropolitan Bank & Trust Company (Metrobank) has said that it has completed a stock rights offering.
Metropolitan Bank & Trust Company (MBT.PH), the Philippines' second-largest lender by assets, has said that it will begin its planned stock rights offering on January 5, 2011.
International Resource News-19 February 2010-Manila Mining to start stock rights offering(C)2010 ENPublishing - http://www.enpublishing.co.uk