When a company intends to issue new shares of stock to the public, it may opt for a rights issue (or rights offering). This provides existing shareholders with the opportunity to purchase new shares at a discounted price before they become accessible to the general public. Shareholders have the choice to buy additional shares according to their preference, but they must do so before the rights expire.
Why do companies use Rights Issues?
To raise money for various reasons, such as expanding their business, paying off debts, and funding acquisitions. Even non-shareholder investors can buy these rights on the market.
What are the types of rights issues?
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Tradable: Shareholders can buy new shares at a discounted price. If they don't choose to exercise their rights, the rights will be sold, and the proceeds will be added to their Trading 212 account.
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Non-tradable: Shareholders can still subscribe to the newly issued shares, but the rights will expire if they choose not to participate.
How do I participate in a rights issue?
If you're eligible, we will send you an email with the offer details and the funds needed to participate. If you have the necessary free funds, you can apply and expect the newly issues shares within 10 days (up to a month). The timeframe depends on the event's structure.
📄 Note
- The free funds needed to subscribe for the event will be blocked until you receive the shares (the pay date).
- We will credit the shares directly to your account.
Why can't I subscribe to a rights issue?
Check if you have the free funds needed to subscribe to the event. We will mention the exact amount in the participation email we will send you.
📄 Note
Funds from ISA cashback or free fractional shares can't be used for rights issues.
I subscribed, but my shares are still missing
If you have subscribed successfully, simply wait for the official share distribution date to receive the new shares. The timeframe varies from 10 days to a month, and we will mention it in the first notification we send to announce the event.
📄 Note
The official share distribution date can be checked on the website of the company you invested in on the respective exchange's site.