Investing term
What is Rights issue?
Existing holders receive the right to buy more shares at a discount, by a deadline.
A rights issue lets existing shareholders buy additional shares at a discount, in proportion to their holdings, by a deadline. The company raises capital while giving current owners first dibs to avoid dilution. You usually have a choice: buy the discounted shares, sell the rights, or let them lapse — and ignoring the notice means forfeiting the value entirely.
Subscribing keeps your slice of the company whole. Doing nothing shrinks it — and forfeits rights you could have sold.
For example
You're offered the right to buy one new share at a 20% discount for every five you own — take it, sell the right, or lose it by the deadline.
Learn it by doing
That's Rights issue in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 8, Corporate Actions: What Lands in Your Account).
Try the free lesson →Why it matters to you
A rights issue forces a decision with real money attached: subscribe and keep your slice of the company whole, sell the rights for cash, or do nothing and watch your ownership get diluted by the holders who did subscribe. Doing nothing feels like the safe default but is the one option that always loses value — the rights expire worthless and your stake shrinks.
⚠ Doing nothing isn't neutral
Letting rights lapse seems like the cautious choice, but it's the only one that hands value away: your percentage of the company falls and you get nothing for rights you could have sold. If you don't want to put in more cash, sell the rights — don't ignore the notice.