External REIT Manager

Ex-Rights refers to the status of a Stock or security after it has gone ex-dividend or after a rights offering has been announced. When a stock goes ex-rights, it means that new investors purchasing the stock will not be entitled to the upcoming rights issue. This typically results in a decrease in the stock’s price, reflecting the dilution from the new shares being issued.

For instance, if a company announces a rights offering where existing shareholders can buy additional shares at a discount, the stock will trade ex-rights on a specified date. Buyers on or after this date will not receive the right to purchase those discounted shares.

Consider a case where Company A has 1 million shares outstanding, and it announces a rights offering for 200,000 new shares at $10 each. If the stock was previously trading at $15, once it goes ex-rights, the price may adjust downward to reflect the additional shares that will be issued. This could result in a new theoretical price of around $13.33, factoring in the dilution effect.