Subscription Price

Definition of 'Subscription Price'


1. A static price at which existing shareholders can participate in a rights offering conducted by a public company so they may retain their proportional ownership of the business. The subscription price will be the same for all shareholders and typically less than the current market price of the underlying stock.

2. Subscription price may also refer to the exercise price for warrant holders in a particular stock. Warrants may be issued at different times by the company along with debt offerings, so subscription prices may vary slightly from one owner to another.

Investopedia explains 'Subscription Price'


Rights and warrants offerings are less common ways to raise capital than through a secondary offering of stock, and may signal a lack of demand for shares in the open market. Issuing rights encourages more long-term ownership of the company, as existing shareholders are increasing their investment in the company.

A rights offering may also come with an oversubscription privilege that allows existing shareholders to pick up any extra rights to shares not claimed by other shareholders. Rights offerings tend to happen pretty quickly, as the subscription price is static and needs to be relevant to the current market price for shareholders to be interested in the deal.



comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center