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 ?
Once the exercise price is established, the subscription rights will become publicly traded, the group said.
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.
The subscription rights will be exercised at a price of USD15.
Common stockholders will receive one basic subscription right for each common share held as of the record date, which is yet to be determined.
Hellenic Bank is planning to raise its share capital by about 220 million, via an offering of subscription rights to current shareholders.
Holders of the company's common stock will receive one basic subscription right for each share of company common stock held as of the September 23, 2010.
Each whole subscription right will entitle the holder to subscribe for one share of the Company's Class A Common Stock at the subscription price of $1.
Each whole subscription right will entitle the holder to purchase one new share of common stock at the subscription price and rights will only be exercisable in whole numbers.
Pursuant to the subscription rights offering, each holder of record of the Company's common stock as of April 21, 2009 received one non-transferable subscription right for each share of common stock owned by such holder on such date, except with respect to shares of common stock held by the BioMimetic 401K Plan.
Each Debenture will be convertible, at the option of the holder, at any time prior to the maturity date, into class A shares of the Corporation ( Shares ) at a conversion price equal to the five-day volume weighted average trading price of the Shares on the day preceding the date on which the Subscription Right becomes exercisable (the Conversion Price ).
375 of a subscription right for each share of common stock owned on the Record Date.
Under the preferential rights issue, every existing share of class A in AddLife will entitle to one subscription right for shares of class A, while every existing share of class B in AddLife will entitle to one subscription right for shares of class B.