Pure Atria Corp(PASW) and Rational(RATL) Merger Message Board

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

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To: Michael Madden who wrote (74)	4/17/1997 2:55:00 PM
From: Skeptic	of 147

<I don't beleive for one bit that speculation about the merger falling through is maintaining the wide discount.> This is the only thing that can possibly be causing the discount. The future direction of the two stocks is totally irrelevant to arbitrageurs shorting RATL and buying PASW. If the deal goes through, they are guaranteed a 40%+ return in 3-4 months. There's no way the smart money would pass up this opportunity if they thought it was a sure thing. No doubt my opinion of the merger might be different if I held either stock for the 40% drop on the announcement, and I agree that disappointment among momentum investors probably explains much of the negative reaction, but neither of these are relevant to the current arbitrage opportunity.

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