Stock rights

Stock rights give their owner the right, but not the obligation, to buy the shares of a company at a specific exercise price for a designated period of time. The term primarily applies to giving current shareholders the right to buy additional shares as part of the issuer's next stock sale. The intent is to give existing shareholders the ability to maintain their current proportion of ownership in the business by acquiring the same proportion of the new issuance. Stock rights may be issued at an exercise price somewhat below the current market price, with no commission charge, thereby making them more enticing to investors.