rights issue

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Explanation of "Rights Issue"

Definition: A "rights issue" is a way for a company to raise money by giving its current shareholders the chance to buy new shares (parts of the company) at a lower price than what they will be sold for to the public later. This is usually done to help the company get more funds for growth or to pay off debts.

Advanced Usage:

• In more complex discussions, you might talk about the terms of a rights issue, such as "subscription rights" and "pre-emptive rights." These terms refer to the rights shareholders have to buy the new shares before they are offered to anyone else.

Word Variants:

• Rights (noun): Refers to the legal entitlements or freedoms that people have.
• Issue (noun): Can refer to a topic or problem, or the act of supplying something.

Different Meanings:

1. Rights (noun): Refers to the entitlements individuals have, like human rights or civil rights.
2. Issue (noun): Can also mean a problem or concern, as in "We need to address this issue."

Synonyms:

• Share offering: A general term for selling shares to raise money.
• Equity financing: A broader term for raising funds by selling ownership in the company.

Idioms and Phrasal Verbs:

• Although there aren't specific idioms related to "rights issue," you can use phrases like:
  • "Buy into": To invest in or support something.
  • "Raise capital": To collect funds for business activities.

Summary:

A "rights issue" is a financial strategy used by companies to allow existing shareholders to buy new shares at a discount.

Academic

Noun

1. 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

Synonyms

• rights offering