Twitter IPO?

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Lynxville
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Twitter IPO?

Post by Lynxville »

Any opinions on whether this would be a buy and hold?

Thanks
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InvestorNewb
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Re: Twitter IPO?

Post by InvestorNewb »

Twitter still isn't profitable, but I would say it carries the same risk as Facebook.
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YttriumNitrate
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Re: Twitter IPO?

Post by YttriumNitrate »

Lynxville wrote:Any opinions on whether this would be a buy and hold?
Definitely a buy and hold......as part of VTI.
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Re: Twitter IPO?

Post by Valuethinker »

You have to take a view whether they can monetize their traffic success.

Also note the recent slowing down, and anecdotal evidence 'bleeding edge' users are moving on to other platforms (don't know how real that is, just read it somewhere).

The valuation is beyond extreme. This is not another Google (ie in retrospect undervalued).

Generally buying things which are very very expensive does not work out.
Vadym
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Re: Twitter IPO?

Post by Vadym »

Hello all,

I registered here primarily to discuss the Twitter IPO, and seeing how they've increased the share price twice already (if I'm not mistaken) I believe that it's slightly worrying. The hype surrounding a company who has managed to double its losses in a year's time seems reminiscent of the late 90's. For those who are seeking a serious investment, Twitter just doesn't cut it for me. What would Graham say about this? Imaginary Profits Only (I know he did not say this directly, but you get the point). ;)
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InvestorNewb
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Twitter

Post by InvestorNewb »

[Thread merged into here. --admin LadyGeek]

Twitter is up over 90%. Wow.

It's a good time to bet against the stock :)
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FillorKill
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Re: Twitter

Post by FillorKill »

Maybe you should put on an inverse split-strike butterfly. :moneybag
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Re: Twitter

Post by sperry8 »

Euphoria. Not good. Reminds me of something... oh yea, late 1999.
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Re: Twitter

Post by chaz »

A Wall Street Journal article today said don't buy twitter at its' IPO - only invest in index funds.
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Re: Twitter

Post by KyleAAA »

I won't be investing, but Twitter is a pretty amazing platform. Maybe one day they might even make some money.
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Re: Twitter

Post by EyeYield »

Lots of trading costs; good for brokers. Over 80 million trades so far of 70 million shares. Guess how many times each share trades today.
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Imperabo
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Re: Twitter

Post by Imperabo »

InvestorNewb wrote:Twitter is up over 90%. Wow.

It's a good time to bet against the stock :)

If they had offered it at $100 it would be down 50%. Would you then be calling it a bargain?
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Ranger
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Re: Twitter

Post by Ranger »

BBL wrote:Maybe you should put on an inverse split-strike butterfly. :moneybag
TWTR options are not listed yet. It will be perfect trading vehicle with price over 40, liquid underlying and high vol. Trifecta for option traders
sscritic
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Re: Twitter

Post by sscritic »

You shouldn't be on bogleheads; you should be tweeting. You are killing the stock!

Tweet more, bogle less!
FillorKill
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Re: Twitter

Post by FillorKill »

Ranger wrote:TWTR options are not listed yet. It will be perfect trading vehicle with price over 40, liquid underlying and high vol. Trifecta for option traders
They'll go live November 15 (last I heard).
sscritic
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Re: Twitter

Post by sscritic »

The S&P is down 1.0%, the Nasdaq 1.5%. Everyone is selling stuff so they can buy twitter. It's a sad day for the country.
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Re: Twitter

Post by Toons »

sscritic wrote:The S&P is down 1.0%, the Nasdaq 1.5%. Everyone is selling stuff so they can buy twitter. It's a sad day for the country.
LOL,,,good one :D :D
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kermit
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Re: Twitter

Post by kermit »

Twitter severely underpriced their company. They literally left billions of dollars on the table to be distributed to investors that were lucky enough to get in before the pop. Had they priced it accurately then Twitter would be pocketing that money. And long term investors would be better off because Twitter would presumably be able to use that money to grow the company.

It's a failure of an IPO. But the news headlines won't say this because the public has become accustomed to and even feels entitled to the pop.
69chevy
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Re: Twitter

Post by 69chevy »

I honestly don't understand how this is even worth half of what it's selling for right now. The company is losing money. What makes this sell for much of anything?
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Re: Twitter

Post by VictoriaF »

Toons wrote:
sscritic wrote:The S&P is down 1.0%, the Nasdaq 1.5%. Everyone is selling stuff so they can buy twitter. It's a sad day for the country.
LOL,,,good one :D :D
NASDAQ at the moment is closer to -2%. I keep waiting for it to get back to the Year-2000 levels. You, people, are telling me that stocks always go up on the long run. But NASDAQ has been running in place.

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Levett
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Re: Twitter

Post by Levett »

What?

You're telling me stocks don't keep going up in the long run?

OMG!

And here I have a portfolio of leveraged ETFs and was gonna sell a few so I could buy Twitter, especially since it ain't got no earnings to speak of (think of all the potential there). Darn. ;-)

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Re: Twitter

Post by zotty »

sscritic wrote:The S&P is down 1.0%, the Nasdaq 1.5%. Everyone is selling stuff so they can buy twitter. It's a sad day for the country.
I wonder...15 billion dollars of liquidity pulled from the market. I don't know if it's true or not, but i seriously about it. The other stocks are chugging along, with a normal interest in selling, but lacking buying.

the new line is that it's yet another "taper" worry because of 2.8 GDP, but if that were the case, I'd think bonds would be getting smacked along with stocks.

Not that there needs to be any reason to any of the daily stock madness, but it is a curiosity.
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VictoriaF
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Re: Twitter

Post by VictoriaF »

Go ahead, Lev, sell you leveraged ETFs and buy Twitter. This time is different,

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Re: Twitter

Post by Levett »

You said a mouthful, Victoria! :happy Lev
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Re: Twitter

Post by Material Guy »

The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
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Re: Twitter

Post by Ranger »

BBL wrote: They'll go live November 15 (last I heard).
Thx. Good to know
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Re: Twitter

Post by abuss368 »

Personally I have never used Twitter and never plan too. Social media can take over your life if not controlled. I just do not have the time.
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Re: Twitter

Post by Ged »

Material Guy wrote:The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
Yes, it is very unfair. I have enough money in Fidelity's system to give me access to IPOs, but there are restrictions on when and how I could sell the stocks that make it unattractive to me. Really I think the only winners are the underwriters.

Which is why this financing mechanism isn't as popular as it used to be.
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Re: Twitter IPO?

Post by LadyGeek »

FYI - I merged InvestorNewb's thread (Twitter) into here.

This thread (merged) is now in the Investing - Theory, News & General forum (IPO news).
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Re: Twitter

Post by lisaac »

Material Guy wrote:The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
Who makes the shares go up so much if not the average Joe? If someone is willing to pay the price and line the pockets of wall street and the select individuals with his money that is his fault..
I would never purchase a stock on an IPO, unless i was using money that was allocated for the craps tables in vegas.. On second thought id probably have more fun in Vegas so i don't see any reason to do it...
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Re: Twitter IPO?

Post by sscritic »

You should have been around in 1999. Value Software was IPOed at 30, opened at $299 and closed the first day at $239.25, up 697.50%. Even number 25 on the list of hot IPOs was up 225% the first day. Twitter is small potatoes.

Check out the chart here:
http://www.theatlantic.com/technology/a ... 99/281259/
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Re: Twitter IPO?

Post by Geist »

TWTR? ...meh...
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Re: Twitter IPO?

Post by jackholloway »

Even Cramer thinks it is overvalued! (Sigh - Mad Money on at the gym.)
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Re: Twitter

Post by feitao »

Ranger wrote:
BBL wrote:Maybe you should put on an inverse split-strike butterfly. :moneybag
TWTR options are not listed yet. It will be perfect trading vehicle with price over 40, liquid underlying and high vol. Trifecta for option traders
Can you elaborate? Do you suggest buying put options? Thanks!
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Re: Twitter

Post by denovo »

KyleAAA wrote:I won't be investing, but Twitter is a pretty amazing platform. Maybe one day they might even make some money.
This says it all.
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Re: Twitter IPO?

Post by Valuethinker »

The tech sector has again reached a point where we do not value this company by its earnings, but by its potential relative to another company with no earnings (Facebook).

The history of these comparative valuation metrics is not a happy one.

There is a group of tech companies that make a *lot* of money: Apple and Google and Microsoft. Margins which would make a CEO in any other industry blush.

Then there is a group that *might* make a lot of money someday: Facebook, Twitter in particular.

Better to travel than to arrive on this one, methinks.
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Re: Twitter IPO?

Post by denovo »

Valuethinker wrote:T
There is a group of tech companies that make a *lot* of money: Apple and Google and Microsoft.
.
I hate it when people group these companies together when they do very distinct things. Microsoft primarily is in the business of making money on operating software for non-mobile machines and generally sucks at everything else they try to do. Google is primarily focused on it's platform of websites, search engine and mobile operating software, with ad revenue generated on said platforms. Apple is basically a juggernaut that is making money on the sale of actual products like their computers, phones, and tablets i.e. hardware.
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Re: Twitter

Post by Material Guy »

lisaac wrote:
Material Guy wrote:The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
Who makes the shares go up so much if not the average Joe? If someone is willing to pay the price and line the pockets of wall street and the select individuals with his money that is his fault..
I would never purchase a stock on an IPO, unless i was using money that was allocated for the craps tables in vegas.. On second thought id probably have more fun in Vegas so i don't see any reason to do it...
Yes, but should the company and underwriters not have accounted for this intelligently in the initial pricing of the stock? And then the average Joe gets bombarded with all the talk about Twitter in the news--everyone from NPR to CNBC was talking about it yesterday. But I do agree that if someone if willing to pay the price then we can't complain. Ah well, happy with my indexing strategy and all of this is of no consequence!
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Re: Twitter IPO?

Post by IPer »

Oh boy! Now I wish I had put that extra $300K into...VTI. You do understand that owning VTI gives you access (partial ownership) to over 2% of Facebook as well?!
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Re: Twitter IPO?

Post by jasc15 »

A quote from an article I read that puts this in perspective:

http://jackealtman.com/why-twitters-ipo ... r-startups
Snapchat and Pinterest are worth around $4 billion dollars each. Evernote and Airbnb are each worth over $2 billion. Path is worth $500 million. By comparison, Peabody Energy, the largest coal company in the world which owns almost 10 billion tons of coal, is worth about $5 billion.
The numbers were kind of vague to me before reading this. A billion, here, a billion there, it was all just noise. It all reminds me of a term a friend shared with me a few years ago: luftgeschäft, (Yiddish for "Air Business"), i.e. occupations that are not a real job or without integrity.
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Re: Twitter

Post by Ranger »

feitao wrote:
Ranger wrote: TWTR options are not listed yet. It will be perfect trading vehicle with price over 40, liquid underlying and high vol. Trifecta for option traders
Can you elaborate? Do you suggest buying put options? Thanks!
No, I am not suggesting any trade decision.

It is just that TWTR will become another horse for traders because:
1) Option traders love liquid options because of tighter spread,
2) Liquid underlying so that it is easier to hedge,
3) Highe volatility good for premium sellers and lot more option strategies will come into play with higher vol and
4) Higher price of stock is another variable because it means less number of contracts to put on to get same bang for the buck reducing their commission costs.
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Re: Twitter IPO?

Post by Valuethinker »

denovo wrote:
Valuethinker wrote:T
There is a group of tech companies that make a *lot* of money: Apple and Google and Microsoft.
.
I hate it when people group these companies together when they do very distinct things. Microsoft primarily is in the business of making money on operating software for non-mobile machines and generally sucks at everything else they try to do. Google is primarily focused on it's platform of websites, search engine and mobile operating software, with ad revenue generated on said platforms. Apple is basically a juggernaut that is making money on the sale of actual products like their computers, phones, and tablets i.e. hardware.
That is perhaps overly micro-- you are too close to the coal face I think.

We would agree they are all technology companies, yes?

And so it's reasonable to group them together. I accept they are different business models.

Apple btw is not so very different from MSFT. In that they both sell a proprietary operating system developed in house, and outsource the hardware production. Apple is more 'vertical' than MSFT in that it sells the hardware with its badge on it. But at the core is a series of 'super OS's' each of which verticalizes the user experience (ios, iphone, OS 10 etc.).

I could have thrown in Intel, Cisco, Amazon, Oracle and Ebay. Except Amazon doesn't make much money ;-). Intel really is in a different business (capital intensive).
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Re: Twitter IPO?

Post by Valuethinker »

sscritic wrote:You should have been around in 1999. Value Software was IPOed at 30, opened at $299 and closed the first day at $239.25, up 697.50%. Even number 25 on the list of hot IPOs was up 225% the first day. Twitter is small potatoes.

Check out the chart here:
http://www.theatlantic.com/technology/a ... 99/281259/
I wonder if we could do it by weight of money made 1st day?

(I haven't read the link to see if they give you that).

IPO first day premiums is an area of (tangential) research interest. Lot of research and debate about it-- see anything academic written by Jay Ritter or in the UK Tim Jenkinson at Oxford.
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Re: Twitter

Post by Valuethinker »

Material Guy wrote:The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
And attacked as such.

Jay Ritter (Florida State University?) has excellent webpages to the long lists of academic articles on same. See also the charges against Frank Quattrone for 'Spinning' (Quattrone is back in the game, a sure sign the good/ bad old days are back).

The 'Bulge Bracket' investment banks have historically squeezed out a lot of performance for themselves and their privileged institutional clients. Google tried to break the cartel, and wound up having a disastrous IPO as a result. Proviing that if it is a cartel, it's a danged good one.

One thing to be wary of. One of the reasons the USA has more venture capital relative to GDP than any other country but Israel, and more *total* venture capital than the rest of the world *combined* is because of this IPO market. Very easy to throw the baby out with the bathwater on this. In Europe we are just nowhere on this. The Venture Capitalists invest in the next Google because there is this well worn path to IPO 5-7 years later with a bullish 'pop' first day which keeps the institutional investors coming back for more.

I say without any irony, that this is part of the genius of American capitalism. You have to have excessive and unfair returns to attract entrepreneurs and entrepreneurial finance.
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Re: Twitter IPO?

Post by abuss368 »

After the Facebook fiasco I still can not believe some folks "invest" in these companies and assume individual stock risks.

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Re: Twitter IPO?

Post by VictoriaF »

abuss368 wrote:After the Facebook fiasco I still can not believe some folks "invest" in these companies and assume individual stock risks.

My Space?
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Re: Twitter IPO?

Post by abuss368 »

VictoriaF wrote:
abuss368 wrote:After the Facebook fiasco I still can not believe some folks "invest" in these companies and assume individual stock risks.

My Space?
You should approach every new love with a clean slate.

Victoria

True but in the individual stock world that can be tough!
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Re: Twitter IPO?

Post by huntertheory »

Should you buy Twitter stock? Throw out the headlines and look at the basic facts. Twitter is:

1. An individual stock
2. representing a share in a business which many people think is a cutting edge platform with a promising future
3. but a company that has never made a profit
4. and burns a lot of cash as it invests in growth and changing technology
5. and operates in a very competitive and constantly shifting market
6. the insiders of the company (who know more than anyone) thought $26/share was a great price *for them to sell out* and
7. the stock is now trading $20+/share more than the price the company insiders/company itself were willing to sell their very valuable shares for.

To me that adds up to a very risky and speculative investment. There's nothing morally wrong with investing in it and, assuming you are comfortable investing in individual stocks, there is an interesting long-run scenario. But that's a lot of risk.

Add to this the fact that you're on the Bogleheads board, the kingdom of indexing. You won't get many buyers here.
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Re: Twitter

Post by Material Guy »

Valuethinker wrote:
Material Guy wrote:The entire IPO system somehow seems rigged to me. The Wall Street folks, speaking in generic terms, underprice the IPO, some people selectively get shares initially and make money when the stock goes up the first day. Ideally no IPO stock should pop the first day as much as Twitter did today. How can the average Joe take advantage of an IPO under such circumstances? I do not buy individual stocks anyway so all of this is academic to me, but the IPO system appears very unfair.
And attacked as such.

Jay Ritter (Florida State University?) has excellent webpages to the long lists of academic articles on same. See also the charges against Frank Quattrone for 'Spinning' (Quattrone is back in the game, a sure sign the good/ bad old days are back).

The 'Bulge Bracket' investment banks have historically squeezed out a lot of performance for themselves and their privileged institutional clients. Google tried to break the cartel, and wound up having a disastrous IPO as a result. Proviing that if it is a cartel, it's a danged good one.

One thing to be wary of. One of the reasons the USA has more venture capital relative to GDP than any other country but Israel, and more *total* venture capital than the rest of the world *combined* is because of this IPO market. Very easy to throw the baby out with the bathwater on this. In Europe we are just nowhere on this. The Venture Capitalists invest in the next Google because there is this well worn path to IPO 5-7 years later with a bullish 'pop' first day which keeps the institutional investors coming back for more.

I say without any irony, that this is part of the genius of American capitalism. You have to have excessive and unfair returns to attract entrepreneurs and entrepreneurial finance.
Good points, Valuethinker, particularly about the venture capital scene in the US, clearly the best in the world. A cartel it certainly is. Of course post-IPO the stock is subject to the usual dynamics and the efficient market.
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Re: Twitter IPO?

Post by umfundi »

Coincidentally, my Twitter account was hacked yesterday.

A friend suggested I sell short then call Fox News. :D

Keith
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