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What Are Preemptive Rights?

April 26, 2017preemptive Rights

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What Are Preemptive Rights?

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Also known as preemption rights or simply preemption, preemptive rights are the rights to have precedence in the acquisition of additional shares of any stock option currently owned by an investor. In general, rights of this type allow the investor to purchase an amount that is equal to the number of shares he or she currently owns. A purchase option of this type is associated with the acquisition of new shares just released for sale, and not shares that have been on the market for some time.