A non-renounceable rights issue is an offer made by a company to its existing shareholders to purchase additional shares, typically at a discounted price. Unlike a renounceable right, a non-renounceable right is not transferable and cannot be bought or sold.
Note: Selfwealth can only facilitate options or rights trading where the offer is listed on a relevant securities exchange, such as the ASX.
Why do companies issue rights?
When a company issues additional shares, the value of existing stock is diluted. A rights issue compensates existing shareholders by giving them the opportunity to purchase newly issued shares at a discount, which is intended to offset the impact of that dilution.