RATIONAL SOFTWARE- BUY OR HOLD Message Board

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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD

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To: spotter who wrote (2502)	7/1/1998 12:32:00 PM
From: John F. Dowd	Read Replies (2) of 3115

I think they need more money and they are going to do one of the disastrous convert. preferred deals that have been destroying small cap companies of late. The dilution that results is severe. The shares are generally issued to of all things "hedge funds" in a private placement. The holders of these securities generally get a formula based on lowest trading levels of the stock in the last x days. This invites the preferred holder to short the stock to boost the number of shares they can buy under the conversion formula. This has just occurred at PLC and OCOM to name a couple. JFD

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