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Finance: What is a subscription price? 3 Views
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Description:
What is a subscription price? A subscription price refers to the fixed, or exercise price of shareholder rights offerings. This may be in the form of oversubscribed or secondary stock offers, warrants, or securities convertible into common stock.
Transcript
- 00:00
Finance allah shmoop what is a subscription price Well in
- 00:07
the old days you'd actually subscribe to these things They
- 00:11
were called magazines and they came on this stuff called
- 00:16
paper and there were tons of them Different focuses our
- 00:19
folks i of your fancy pants gardening people time and
Full Transcript
- 00:24
lifestyle There was a set price if you wanted a
- 00:26
year These things you paid it while the term relates
- 00:28
in all things finances well In this sense a subscription
- 00:32
agreement applied directly to a new issue of shares from
- 00:34
a company or securities anyway raising money teo you know
- 00:38
pay off their new fleet of corporate jets are open
- 00:40
up china as a new market or for that pesky
- 00:42
lawsuit they got hit with for their products Apo supposedly
- 00:46
sticking teo certain types of skin So in this type
- 00:49
of offering offered preemptively to already existing holders of shares
- 00:54
a subscription agreement outlines the terms at which current investors
- 00:57
can invest in the new offering like fioretti ona hundred
- 01:00
shares of snail co The shipping company that vows to
- 01:03
send your packages slowly and carefully and they're trading and
- 01:07
i'll say eighty bucks each Well then that company might
- 01:10
have a rights offering in which current shareholders get the
- 01:12
right to buy new shares at say seventy seven bucks
- 01:15
each Well that's seventy seven dollar price is fixed as
- 01:18
the subscription price I'ii buyers of the incremental sale of
- 01:22
securities Get the right to pay seventy seven bucks for
- 01:24
them and they usually come in a discount to the
- 01:26
current market price So as the kind of sort of
- 01:28
semi guarantee that the full allotment of shares that the
- 01:31
company wants to sell well in fact actually be sold
- 01:34
to people who have already indicated that they like the
- 01:37
company or they wouldn't be holding the shares in the
- 01:39
first place And that goes true Ah even if those 00:01:42.119 --> [endTime] shares are sold very very slowly
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