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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD

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To: Thomas Haegin who wrote (2524)	7/7/1998 9:05:00 AM
From: diana g	Read Replies (2) of 3115

Thomas + Thread, Re: "...Diana, are you still strong on RATL?... I am not concerned about Earnings. I am relatively sure they will meet expectations. Of course there is no way to be 100% certain, but mngmt needs to establish a good record to build investor/Wall St confidence (after last Autumn's debacle), and they know it. That together with the fact that we have No information of any substance which would make us think RATL is having problems makes me unconcerned about a negative earnings surprise. I am thinking we might see a nice surge when another good quarter (showing continued stability)is reported. The annual meeting could also have a positive effect. In regard to Proposal2-Blank Check Preferred Stock- I think the main worry is that they would use it for making acquisition(s), which would depress RATL's price in the short term, altho I suppose the right acquisition(s) could be very positive long term. ---(If there are other potential problems would someone point them out? I sure don't claim to be a stock maven.)--- Keep in mind that: 1) They haven't got it yet. "The affirmative vote of a majority of the outstanding shares of common stock will be required to approve Proposal 2.......abstentions and broker non-votes will have the same effect as a vote against the proposal." 2) If they do get approval, there will not be any announcements of acquisitions the next day. Mngmt states in the Annual Meeting Notice (pg 8 para 1): "The Company is not presently engaged in any negotiations....understandings or plans concerning the issuance of such shares." Any such action following quick on the heels of the annual meeting would invite shareholder lawsuits. By the way, I'm voting _Against_Prop 2. regards, diana

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