rights offering

Friendly

Explanation of "Rights Offering"

Definition: A rights offering is a way for a company to raise money by giving its existing shareholders the opportunity to buy new shares of stock at a lower price than what the shares will be sold for to the public later. This means that current shareholders have the "right" to buy the new shares before anyone else.

Usage Instructions

• Context: You would typically use "rights offering" when talking about finance, stocks, or investments.
• When to Use: Use this term when discussing how companies can raise funds from their existing investors.

Example

• "The company announced a rights offering, allowing its shareholders to purchase additional shares at a 20% discount."

Advanced Usage

In finance discussions, you might say: - "Due to the rights offering, shareholders were able to maintain their proportional ownership in the company despite new shares being issued."

Word Variants

• Rights: The permissions that allow shareholders to buy new shares.
• Offering: Refers to the act of making shares available for purchase.

Different Meanings

• Rights: In a general sense, it can also refer to legal entitlements (like human rights).
• Offering: This can refer to other types of offerings, like public offerings of stocks (when shares are sold to the public for the first time).

Synonyms

• Shareholder rights issue: This is a similar term used interchangeably with rights offering.
• Preemptive offering: Another term that can be used, especially when emphasizing the prevention of dilution of shares.

Idioms and Phrasal Verbs

While "rights offering" doesn't have specific idioms or phrasal verbs associated with it, you could use: - "Exercise your rights": This means to take advantage of your rights, such as buying shares in a rights offering.

Summary

A rights offering is an important financial term that helps shareholders buy more shares of their company at a better price.

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 issue