Series 65: Subscription Rights

Subscription Rights

A subscription right is similar to a warrant but has a shorter life, usually lasting two to four weeks. Essentially, subscription rights originate when a company decides to raise additional money by offering additional shares of an existing stock to the public. This is called a follow-on offering.

When a follow-on offering occurs, current stockholders have a preemptive right to maintain their proportionate ownership share in a stock.