Rights Offering

Offering of Common Stock to existing shareholders who hold rights that entitle them to buy newly issued shares at a discount from the price at which shares will later be offered to the public. Rights offerings are usually handled by Investment Bankers under what is called a Standby Commitment whereby the investment bankers agree to purchase any shares not subscribed to by the holders of rights. See also Oversubscription Privilege; Preemptive Right; Subscription Right.