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Subscription shares

A type of share that investors can convert into new ordinary shares in the company at some time in the future at a fixed price.

A type of share that investors can convert into new ordinary shares in the company at some time in the future at a fixed price.

Subscription shares have similar characteristics to warrants, including a limited life, but can be held more freely in an ISA. They don’t have the same rights as ordinary shares (e.g. they may not be entitled to any dividends before they are converted into the ordinary shares).

They are also much higher risk than ordinary shares, as you may not want to convert them into new ordinary shares if you can buy these on the stock market more cheaply. Subscription shares can therefore expire worthless and you could lose all the money you paid for them.

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