# Rights Issue

*Markets & Instruments — Finicade finance glossary*

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.

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.

**Also known as:** rights offering, subscription rights

**Related terms:** [Dilution](https://finicade.com/glossary/dilution), [Secondary Offering](https://finicade.com/glossary/secondary-offering), [Common Stock](https://finicade.com/glossary/common-stock), [Market Capitalization](https://finicade.com/glossary/market-capitalization), [Recapitalization](https://finicade.com/glossary/recapitalization)

Source: https://finicade.com/glossary/rights-issue