Okuzeka
Investing & the Stock Market vocabulary · Dividends & Corporate Actions

Rights issue

Meaning in investing & the stock market, with examples

/ˈraɪts ˌɪʃuː/nounCommon term

In investing & the stock market, rights issue means: A way for a listed company to raise new money by offering existing shareholders the right to buy additional shares, usually at a discount and in proportion to what they already own.

In Turkish: bedelli sermaye artırımı, bedelli

How it is used

Companies launch a rights issue to pay debt or fund growth. Shareholders can take up their rights, sell them or let them lapse. The share price is adjusted when the rights are separated. American texts often say 'rights offering'.

Example sentences

  1. The airline launched a rights issue to strengthen its balance sheet.

  2. Shareholders who do not take part in the rights issue will see their stake diluted.

Common collocations

  • launch a rights issue
  • take up rights
  • rights issue price
  • fully subscribed rights issue
  • bonus issueAn issue of new shares given free to existing shareholders in proportion to their holdings, usually by turning reserves or retained profits into share capital.
  • IPOShort for initial public offering: the first time a private company sells its shares to the public and lists them on a stock exchange.
  • shareholderA person or organisation that owns one or more shares in a company and therefore owns part of it, with rights such as voting and receiving dividends.
  • stock splitA company's decision to divide each existing share into several new shares. The share price falls in the same proportion, so the total value does not change.

More terms: Dividends & Corporate Actions

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This page explains English vocabulary for learners. It is not financial advice.