Cum Rights

When a company announces a rights issue, existing shareholders get the right to buy new shares, usually at a discount to the current share price. That right attaches to the existing shares and it has a value. In the period after the announcement of an impending issue and before it has been completed, the question is whether the purchaser of existing shares also gets the right to participate in the rights issue or whether that right stays with the vendor.

Accordingly, the market has developed the system of 'cum rights' and 'ex rights'. When a share is cum rights, it means that it is offered for sale with any associated rights. When it is ex rights it is offered for sale without the rights. The share price of the shares will be higher cum rights than it will be ex rights. The phrase cum all means that all supplementary advantages will be included.