Rights Issue
Also called: rights offering, subscription rights
A rights issue offers existing shareholders the chance to buy new shares at a discount, in proportion to their holding, so they can avoid dilution by participating. Ignoring your rights is a genuine transfer of value away from you — in most markets unexercised rights can be sold, and letting them lapse is simply throwing money away. Deep-discount rights issues are typically a sign of a balance sheet that needs repair urgently.