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.

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)

References in periodicals archive ?
The distribution of the subscription rights will be made to Sears Holdings' stockholders of record as of the close of business on 7 September 2012, the record date for the distribution, or the record date.
1 percent, but are able to financially compensate for this dilution by selling their subscription rights.
Holders of series A, B and C common shares will be given one-fourth of a share of the corresponding series of Liberty Broadband common stock for each of their shares held as of the record date for the spin-off, as well as a subscription right to buy one series C Liberty Broadband common share for every five shares of Liberty Broadband common stock they receive in the spin-off.
Stockholders will receive one non-transferable subscription right for every share of common stock they hold as at 21 November 2011.
Each share owned is allocated one subscription right and ten subscription rights are required per new issue share.
Those shares remaining after existing shareholders have exercised their subscription rights will be allocated to JJW Central & Eastern Europe Beteiligungsverwaltungs GmbH (an Al Jaber company) in an amount corresponding to 20% of the shares in Austrian Airlines, after taking into consideration the subscription rights exercised by the company's existing shareholders.
A REGISTRATION STATEMENT RELATING TO THE COMMON STOCK UNDERLYING THE SUBSCRIPTION RIGHTS MENTIONED IN THIS PRESS RELEASE IS EXPECTED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
Under the terms of the rights offering, each stockholder is receiving one subscription right for each share of common stock of the company owned as of the record date of 12 October 2016.
Subscription for new shares without subscription rights may also be made.
Shareholders registered in the share ledger of Oasmia at the record date of 28 October will receive five subscription rights for each share held.
The multi-state bank holding company will offer to its shareholders subscription rights, consisting of a basic right to buy one unit and an over-subscription right to purchase additional units.
4% of the new share issue, was subscribed for with subscription rights and a total of SEK14.