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

To: Randy Ellingson who wrote (2882)	3/29/1999 6:28:00 PM
From: ratlong	Respond to of 3115

The triple is not really a fair way to assess the M&A value of Rational. The acquisition price would have been market value about six months ago. If I were a CA shareholder, I'd be concerned that the deal could have been done for less. The PLAT CEO did a good job in getting the most for his shareholders. While it clearly sets a bar for Rational (a company moving forward vs. PLAT moving backwards- $32 to $10 while the market goes from 7500 to 10,000) a triple is not really a fair assessment. I think a +50/share is a no-brainer in a takeover and probably +60 is more likely. The question is who would pull the trigger? Bottom line is that the acquisition is positive for RATL. CA has a history of acquiring companies and letting certain products go. If they acquired PLAT for their tools that compete with Unicenter, that could mean their app dev tools will fall behind. Regardless, the odds are that any progress that PLAT was making on integrating their product lines will be adversely impacted by this move. CA has a bad reputation in the market. Overall positive for the Rational position as the leader in solutions- the thought leaders as well. What in the hell was the CA CEO doing talking about "knowledge portals" for the combined CA/PLAT offering(Business Wire press release)? Are they trying to get YHOO-like multiples? Pretty humerous stuff that the web has become so hot that an acquisition of a has-been database management company with a penchant for acquisitions is now a license to call oneself a knowledge portal. Is he talking about ADVisor/Process Continuum and Paradigm Plus? Lost there- if I were CA stockholders, I'd be wondering what this company is going to be in the future and what is so wrong with their business that they would get roped into a triple on an acquisition of a company that is admittedly in BIG TROUBLE. Anyway, I think it is pretty good stuff for Rational and I believe it will slow up a perceived competitor- opens the door for Sterling alittle. Might want to look at Sterlings stock.