Term · Capital Measures & Financing
Subscription right
In briefThe subscription right gives existing shareholders priority to subscribe to new shares in a capital increase in proportion to their holding. It protects against full dilution and deserves particular scrutiny when it is excluded.
Definition
The priority right of existing shareholders to acquire new shares in a capital increase in proportion to their existing holding.
How it is calculated
Formula. Subscription ratio = number of old shares ÷ number of new shares to be issued.
Why it matters for small caps
The subscription right protects existing shareholders from full dilution in capital increases and should be examined particularly closely when it is excluded.
Common misreadings
- An exclusion of subscription rights is automatically judged as negative, but for small, fast financing rounds it is market-standard and legally regulated.
In the process
Frequently asked
What is a subscription right?
It is the priority right to acquire new shares pro rata in a capital increase. This allows shareholders to maintain their ownership stake.
How does the subscription right work?
The subscription ratio results from old to newly issued shares. It determines how many new shares a shareholder may subscribe to.
Is an exclusion of subscription rights always negative?
No, for small, fast financings it is market-standard and legally regulated. It should, however, be examined closely.
Related terms
Sources
Primary
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Methodology
IFRS Foundation – IAS 33 Earnings per Share
https://www.ifrs.org/issued-standards/list-of-standards/ias-33-earnings-per-share/
https://www.ifrs.org/issued-standards/list-of-standards/ias-33-earnings-per-share/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.