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Technology Stocks : Pure Atria Corp(PASW) and Rational(RATL) Merger
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To: James Murray who wrote (52)4/11/1997 4:16:00 PM
From: david decamp   of 147
 
Gee, guess I should have waited until the last half hour.

I just checked out the intraday graph, and in the last ten minutes
PASW dipped below 8 briefly, while RATL was actually moving up
a bit off the day lows. There was a frenzy of buying at 8 1/8 on the
last couple of trades including a 45K and 50K block.

I sense that the price was being kept low so somebody could
back up the truck. Based on the closing prices RATL at 13 3/8
bid and PASW at 8 1/8 ask, we now have a 48% discount in
place. Utterly amazing. Unfortunately, I bought my entire
stake at 8 5/8 (instead of following my own advice and buying in two or three separate blocks), but even then it is still at a 39.5% discount.
And, I can't help but think that whoever bought 95K shares at the close thinks that the deal will go through. They just spent 3/4 of
a million.

The only thing I can think of is either artificial price control, or that
the market players are just so preoccupied with other carnage that
they are missing out on a tremendous short-intermediate term
play.

It sort of reminds me of the reaction to the MCI/BT merger,
where it took months for MCI to work its way slowly up to near the
original announced acquisition price. But there were antitrust and
international telecommunications laws involved there, and there
is nothing that will stand in the way of this merger. The way I look
at it now, I only lose money if the deal goes through and RATL
is trading below $9.50 or so based on my purchase price of
8 5/8ths.

Thoughts anyone?

Dave
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