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Technology Stocks : Pure Atria Corp(PASW) and Rational(RATL) Merger

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To: seth thomas who wrote (32)4/10/1997 6:58:00 PM
From: Jim Tao   of 147
 
Steven, I don' think that the "company" lost $1billion. The company is still the same company didn't change a bit. It is the value of the stock, who ever have them and want to sell it NOW, will lose money or on another word, worth less money. So for RATL, they didn't lose anything the ratio for merger is fix @ 0.9 no matter the price of RATL is $100 or $1. If the deal go through, PASW will always worth 90% of the value of RATL. As for the future of the merger itself, it is hard to tell, but I think the stock price of the company shouldn't be as a big factor as the technical merits. Before the announcement, RATL thinks that PASW worth at least $20, that't why they made the ratio as 0.9. Both companies have no way to know what the reaction of the Street.
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