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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Haegin who wrote (2697)	10/20/1998 1:06:00 PM
From: ratlong	Read Replies (1) \| Respond to of 3115

I agree with you that it is ill-advised on both fronts. As for the credits to the sales force, they can do that but there are risks involved. As for the clients, I would not be pleased if my products were held up b/c of WS concerns. A couple of other thoughts... I think we need to consider vesting periods and reworking of vesting periods for the companies acquired by RATL. Most organizations, when they acquire another company, have a minimum 1 yr and often 2 yr (or somewhere inbetween) revesting period to make sure that the execs stay with the company. We could be reaching that period for some of the management people. (Late 96 and early 97 to ???) It will be interesting to see whether people hold and stay with the recent uptick or whether they move on. The senior execs have been buying, but the real indication is whether the next line of management buys and stays vs. cashing out and moving on. These guys are worth alot more than just a few months ago- what do they do with their new found socio-economic status? Reinvest or cash in??? They talked about the upward HR spiral which is huge and is definitely THE game in Silicon Valley and to a certain extent on Rte. 128 in Boston (Cupertino and Lexington). However, if the upper management leaves, they will take the next line with them. If that happens, RATL is in big trouble. I honestly think that the single biggest risk facing this company is the people- number and quality. Current management retention is THE issue right now.