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Daniel McCarthy - Emory University, Goizueta Business School. Atlanta, GA, US

Daniel McCarthy Daniel McCarthy

Assistant Professor of Marketing | Emory University, Goizueta Business School

Atlanta, GA, UNITED STATES

Marketing expert focused upon methodologies and frameworks for predicting customer behavior to better understand firm-level outcomes

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Biography

Daniel McCarthy is an Assistant Professor of Marketing at Emory University's Goizueta School of Business. His research specialty is the application of leading-edge statistical methodology to contemporary empirical marketing problems. His research interests include customer-based corporate valuation, which he popularized, customer lifetime value, limited data problems, data privacy, and the marketing/finance interface. He is also actively researching the causal effect of actions and events on customer purchase behavior. His research has been accepted and published in top-tier academic journals, including Marketing Science, the Journal of Marketing Research, and the Journal of Marketing. His work has won numerous research awards, including the Lehmann, MSI Clayton, Gary Lillien Practice Prize, and MSI Young Scholar, and been a finalist for many others, including the Paul Green, Hunt/Maynard, MSI/Root awards. His work has been featured in major media outlets such as the Harvard Business Review, Wall Street Journal, FT, Fortune, Barronís, Inc Magazine, the Economist, and CNBC.

Education (3)

University of Pennsylvania: PhD, Statistics 2017

University of Pennsylvania: BSc, Economics 2006

University of Pennsylvania: BAS, Systems Science Engineering 2006

Areas of Expertise (7)

Missing Data

Customer relationship management (CRM) using Digital Marketing and Analytics

Customer-Based Corporate Valuation

Marketing-Finance Interface

Customer Lifetime Value

Bayesian Computation

Valuation

Research Spotlight

In the News (52)

Online Brands Try a Traditional Marketing Strategy: Physical Stores

The New York Times  online

2022-03-23

As digital advertising costs rise, more direct-to-consumer retailers are opening shops, leasing turnkey options or securing short-term spaces in other stores.

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Peloton founder John Foley calls recent events ‘humbling,’ as cycle maker looks to redefine itself

NBC News  online

2022-02-08

Dan McCarthy, assistant marketing professor at Emory University, points out that a price reduction on Peloton’s original Bike, initiated last fall, didn’t spur demand for the machine like the company had hoped. Last week, the company began charging a fee of $250 for delivery and setup of the Bike, and a $350 fee for those services on its Tread, effectively raising prices. “It doesn’t seem to me like prices are very effective lever in bringing a whole lot of new people in,” said McCarthy, who is not related to the incoming Peloton CEO. “And I don’t think that they are going to somehow be able to change that.”

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Why corporate pandemic winners like Peloton, Netflix, and DoorDash are suddenly stumbling

Fast Company  online

2022-01-25

“We are seeing a number of these customers evolving into new habits,” says Dan McCarthy, a professor at Emory University’s Goizueta Business School. “No habits are permanent after all. What’s worse, at businesses like Peloton, Netflix, and DoorDash, we are seeing a very rapid decline in customer adoption. So, for customer adoption, it seems fair to say that the new normal for these services is the same as the old normal, perhaps with a period of time below normal to flush out all of the demand that had been pulled forward.”

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Top Retail Influencers 2022

Rethink Industires  online

2022-01-01

Daniel McCarthy Assistant Professor of Marketing at the Goizueta Business School of Emory University

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DTC Briefing: Recent earnings are a bellwether for the challenges consumer startups will face in 2022

Modern Retail  online

2021-11-09

“It seems like basically as we work our way deeper into the lifecycle of the pandemic, we have seen a lot more unevenness in companies’ ability to maintain the growth they saw during the pandemic,” said Daniel McCarthy, assistant professor at Emory University’s Business School.

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Rent the Runway Is a Listing to Be Depreciated

The Wall Street Journal  online

2021-10-20

Leave it to a fashion company to dress itself up for the big show. Ahead of its public offering next week, Rent the Runway Inc. said in a securities filing Monday that it is seeking a valuation of as much as $1.5 billion on a fully diluted basis—roughly half a billion dollars more than where it was valued in March 2019 before the pandemic temporarily kiboshed the need for any kind of wardrobe other than sweatpants.

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Warby Parker’s strong debut could be a good sign for brands looking to go public

Morning Brew  online

2021-10-01

Lots of eyeballs were on Warby Parker’s direct listing this week. And the DTC darling delivered: Its stock price soared 36% in its Wednesday debut to close at $54.49, giving the company a $6+ billion valuation. There was a slight dip yesterday, with Warby ending the day at $53.05.The strong showing could be a positive bellwether for the slew of online brands that have recently filed to go public, said Daniel McCarthy, assistant professor of marketing at Emory University’s Goizueta School of Business.

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Warby Parker soared in its market debut, setting a high bar for other online-first retailers

CNBC  online

2021-09-30

“The market’s perception of Warby is very, very generous,” said Dan McCarthy, an assistant professor of marketing at Emory University, who follows brands such as Peloton, Revolve and Casper that began by selling products online directly to consumers. “People are willing to give the company the benefit of the doubt.”

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Watch out Amazon: These startups deliver in a matter of minutes

CNN  online

2021-09-30

"My expectation is most of these players for longer than we expect are going to be unprofitable," said Daniel McCarthy, a professor at Emory University's Goizueta School of Business who studies online delivery companies. "The losses are going to be supported by venture capital firms."

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Warby Parker Debuts at $6 Billion Valuation. Should You Buy?

Bloomberg  online

2021-09-29

Even if they don’t have impaired vision, some people might turn to blue light blocking glasses, including the line offered by Warby Parker. The spectacles are designed to reduce eye strain from screens and can help improve sleep. “A lot of people interested in buying Warby Parker glasses don’t have a medical conditions,” said Daniel McCarthy, assistant professor of marketing at Emory University. “The reason I’m getting them is I want the blue light filter. You have all these people with all these different needs for glasses, some of which are related to vision, and some of which may not be.”

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Why digital retail darlings Warby Parker and Allbirds are betting big on stores to grow ahead of public debuts

CNBC  online

2021-09-17

Emory University assistant marketing professor Dan McCarthy keeps tabs on companies such as Casper Sleep, Figs, Revolve and Peloton as he monitors Warby Parker and Allbirds. They all have predominantly relied on the internet for sales. But some of them, chiefly Casper and Peloton, have also struggled to make a profit, which could give potential investors pause. “If you can’t generate any profits, then I’m sorry, you’re not going to be a valuable stock in the long run,” McCarthy said.

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Ghost Kitchens Haunted by Unresolved State Tax Questions

Bloomberg Tax  online

2021-09-16

The hottest innovation in dining, home-delivered meals prepared in mysterious kitchens shielded from public view, is gaining the attention of state revenue agencies as a potential magnet for tax controversies. Known as “ghost” or “virtual kitchens,” these delivery-only businesses operating from non-restaurant locations or unused corners of poorly performing restaurants have surged in tandem with overall restaurant delivery services during the pandemic.

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In Food Delivery, Iron Fists Could Trump the Invisible Hand

The Wall Street Journal  online

2021-09-16

Food delivery companies are invoking the Founding Fathers to inveigh against the alleged tyranny of the New York City legislature. We may have lived long enough to see Alexander Hamilton rap, but do we think he would be ordering up pease porridge on Grubhub if he had the chance?

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Surprising Learnings From Warby Parker And AllBirds IPO Filings

Forbes  online

2021-09-03

Warby Parker reported a blended customer acquisition cost of $27 for 2019 (the last non-pandemic year), which is quite reasonable for a business that generates $72 in contribution profit per order. Daniel McCarthy, a Marketing Professor at the Goizueta Business School of Emory University, and a guru in customer value calculations, identified a significant wrinkle: Warby Parker uses a “novel” definition of customer acquisition costs, because they apply their costs against all active customers, and not just newly acquired ones. This means the costs to acquire new customers (traditionally the definition of CAC), is probably significantly higher.

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Walmart wants to deliver you stuff, even if you didn't buy it at Walmart

CNN Business  online

2021-08-24

This could be challenging to do picking up orders from several different merchants at a time, rather than delivering them from a central location, said Daniel McCarthy, a professor at Emory University's Goizueta School of Business who studies online delivery companies. "A big open question will be Walmart getting the economics to work," McCarthy said. "It will be logistically more cumbersome and thus expensive to manage many small fish instead of a few whales."

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Tech’s Customer Loyalty Is Priceless Until It Isn’t

The Wall Street Journal  online

2021-07-17

Last year, consumers canceled plans, hunkered down and saved money. The lengthy pause in spending hurt many businesses, but it may also have leveled the playing field for others. Brands now have a unique opportunity as the world opens back up to acquire new customers or those once loyal elsewhere, with the hope of securing their business for the long-term. Investors will need to decide what that loyalty is worth.

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The Race for Your Dollars

VOX's Recode Podcast  online

2021-06-29

The restaurant delivery industry is worth more than $100 billion. But none of the major apps are profitable. In this episode, the key battles that have shaped the delivery wars from the point of view of founders, company executives and venture capitalists. And a key question: With billions invested, rockstar IPOs and a pandemic that exploded the growth of the industry, why aren’t these companies profitable?

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The ravenous economy around delivering your dinner

Axios  online

2021-06-17

"The apps are definitely going to hold onto some of the gains," says Daniel McCarthy, a business professor at Emory who has studied delivery apps. "The question is how much." Economists were projecting a deceleration in food delivery app growth in 2020. Instead they grew by 122%, per McCarthy's research.

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“The Netflix of Wellness”: Inside the Hollywoodization of Peloton

MSN  online

2021-06-14

Daniel McCarthy, an assistant professor of marketing at Emory University’s Goizueta Business School who has studied Peloton’s business, predicts that churn rate won’t change markedly anytime soon. One case in point: His wife wants to upgrade from Peloton’s regular bike to the $2,945 Bike+, because the latter has a screen that swivels — better for taking the strength classes she likes. Says McCarthy, “Their content is so good they have people wanting to buy more expensive hardware just to use it.”

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Why the food-delivery boom may soon hit the skids

The Economist  online

2021-05-26

The closure of shops and imposition of mandatory lockdowns at the onset of the covid-19 pandemic last year emptied cities of commuters and consumers. Mornings were greeted by peaceful birdsong and nights were abuzz with a new breed of urban explorer: an army of bicycle and scooter couriers delivering take-away meals.

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DoorDash shares surge 15 percent on surprisingly strong sales

New York Post  online

2021-05-14

The industry’s growth during the pandemic has been fueled by “artificial demand” that will largely evaporate after consumers return to their pre-COVID lives, according to a recent academic report co-authored by Daniel Minh McCarthy, a marketing professor at Emory University’s Goizueta Business School.

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5 Big Reasons the Delivery ‘Boom’ May Soon Go Bust

New York Magazine’s GrubStreet  online

2021-05-05

Last year, the major delivery platforms experienced major growth: UberEats reported its restaurant base grew by 75 percent, while DoorDash increased revenue by 241 percent during 2020. However, according to a new study published by Daniel Minh McCarthy and Elliot Shin Oblander, an assistant professor of marketing at Emory and a Ph.D. student at Columbia Business School, respectively, the gains the industry experienced last year can be attributed mostly to a “substitution away from dine-in behavior.” And, contrary to what reps from delivery companies have argued about user growth, they’re mostly splitting, not increasing, customers with restaurants, with users signing up for multiple services instead of unique customers.

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For Food Delivery, Covid-19 Was a Sugar High

The Wall Street Journal  online

2021-04-30

After monster surges in use over the past 12 months because of the pandemic, food-delivery companies are doubling down. For example, DoorDash , which said its revenue grew by a quarterly average of 220% year over year in 2020, has been adding delivery for groceries and convenience goods. And the Uber Technologies platform Uber Eats has bolstered its profile with grocery delivery through Cornershop in addition to its recent acquisitions of its food-delivery competitor Postmates and the alcohol-delivery platform Drizly.

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Food delivery apps face multibillion-dollar hit as COVID pandemic lifts: study

New York Post  online

2021-04-29

Sales last year surged 122 percent to $51 billion, compared to sales of $23 billion in 2019, as pandemic lockdowns forced people to turn to takeout more often, say researchers Daniel Minh McCarthy, a marketing professor at Emory University’s Goizueta Business School, and Columbia University PhD candidate Elliot Shin Oblander.

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Can E-Scooters Contribute to Economic Recovery Post-Covid-19?

Spin  online

2021-03-11

“The post-COVID economic recovery remains slow, but this research shows we shouldn’t ignore the positive impact of micromobility on small businesses,” said Dan McCarthy, senior author of the study and assistant professor of marketing at Emory University’s Goizueta Business School."

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Scooters Drive Significant Spending in Cities, New Emory Study Finds

Bird  online

2021-03-11

“All the data points to the same conclusion: e-scooters drive consumer spending and likely provide a significant financial boon to local economies,” said McCarthy.

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DoorDash IPO and customer valuation

Wharton Business Radio  radio

2020-12-10

“I wasn’t surprised in the sense that the timing for the IPO couldn’t have been more perfect. They were putting up 100-200% gross year on year for 5 years in a row before COVID, COVID shot up their growth to 200% a year, they had the Prop 22 ruling which went in their favor, they’ve been cash flow positive for the past couple of quarters, hot IPO market – this was a great time for them to IPO and the market reacted accordingly.”

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DoorDash poised to grow despite challenges, experts say ahead of public debut

S&P Global: Market Intelligence  online

2020-12-08

Even before the pandemic hit, customers who stay with the firm tend to place more and more orders over time," Daniel McCarthy, assistant professor of marketing at Emory University, told Market Intelligence.

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Remote learning boots back-to-school spending

NPR Marketplace  online

2020-08-11

"Back-to-school shopping is mirroring what parents may have bought for themselves at the start of the pandemic,” said Daniel McCarthy, a marketing professor at Emory University.

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Big-data marketing initiatives help organizations capitalize on new growth, experts say

Atlanta Business Chronicle  online

2020-05-19

“Transitioning certain business processes to be more integrated and customer-centric is taking a lot longer than it should due to functional silos,” McCarthy said.

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Corporate Valuation Will Never Be the Same — Nor Should It

Financial Times  online

2020-04-24

McCarthy adds, “You always want to play good offense, but in a bear market, playing good defense [using CBCV] can be what keeps you in the game.”

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Blue Apron Will Have Trouble Keeping Its Newfound Customers

Markets Insider  online

2020-04-14

Dan McCarthy, assistant professor of marketing at Emory University’s Goizueta Business School, recently told Yahoo Finance that this newfound business isn’t the answer. “The amount of repeat business they were getting was not enough to sustain their business,” McCarthy said in a phone interview. “It’s likely delaying the inevitable.”

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Wayfair shares surge 37% as coronavirus drives sales of office furniture and home decor

CNBC  online

2020-04-06

The fact that Wayfair is seeing an increase in sales makes sense,” said Dan McCarthy, an assistant professor of marketing at Emory University. “Wayfair had no physical stores, while its competitors do, which those competitors could not sell through.”

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Blue Apron Fends Off Obscurity in Another 15 Minutes of Fame

Bloomberg  online

2020-03-27

“The amount of repeat business they were getting was not enough to sustain their business,” McCarthy said in a phone interview. “It’s likely delaying the inevitable.”

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Investors Need to Know: What’s Your Customer Worth?

Net Promoter System  online

2020-03-12

Dan McCarthy, of Emory University’s Goizueta Business School and cofounder of Theta Equity Partners, explains how transparent disclosures about customer value would fundamentally change investor and executive behavior.

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Now There’s a Way to Link Customer Behavior to Share Price

Net Promoter System  online

2020-02-27

Dan McCarthy of Emory University’s Goizueta Business School and cofounder of Theta Equity Partners explains how “customer-based corporate valuation” makes customer behavior a critical element of financial valuation.

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Casper prices IPO at $12 a share, which is at the low end of estimates

CNBC  online

2020-02-05

“When Casper’s last [funding] round was done, the mattress category was growing quite nicely,” said Dan McCarthy, an assistant professor of marketing at Emory University’s Goizueta School of Business.

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How to Value a Company by Analyzing Its Customers

Harvard Business Review  online

2020-01-01

This article details how managers and investors can utilize models of customer acquisition, attrition, and spending to gain new insights into the value of a firm.

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Why Peloton Stock Dropped More Than 10% After ‘Sexist’ Ad Backlash

Forbes  online

2019-12-05

Daniel McCarthy, an assistant professor of marketing at Emory University’s Goizueta Business School, attributes the stock price volatility directly to the ad.

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Peloton's hot IPO prospects: How much is just spin?

CBS News  tv

2019-09-26

"According to the math, says McCarthy of Emory's Goizueta Business School, if just 0.65% of Peloton's customers abandon its streaming services each month, then the average customer sticks around for nearly 13 years. That may be overly optimistic."

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Finding the Value in IPOs: Why Customer Behavior Holds the Key

The Wharton School (K@W)  online

2019-08-13

“Not all revenue growth is created equal.”

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Outlook for Slack's opening trade on the NYSE through a direct listing

Yahoo! Finance  online

2019-06-20

“We’ve been hearing this $26 reference price that equates to a $16 billion equity valuation, and conservatively I put their valuation at closer to $18 billion, or even higher than that.”

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Costs Catch Back Up With Wayfair

The Wall Street Journal  online

2019-05-02

"... while in the fourth quarter the company’s customer-acquisition costs hovered around $77 per customer, in the first quarter it shot up to $88 per customer, a new high, according to Daniel McCarthy, a marketing professor at Emory."

The Wall Street Journal

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Wayfair shares plunge 12% as losses widen, hurt by high costs

CNBC  online

2019-03-01

"The company is also spending a lot to acquire new customers, according to Daniel McCarthy, an assistant professor of marketing at Emory University. He has been warning about this trend for some time. In the first quarter, customer acquisition costs were $88 per customer."

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Why and How to Transition to a Subscription Business

CFO  online

2018-10-02

Such benefits as predictable recurring revenue, easier borrowing, and strong cash flow are just for starters. However, there are risks as well.

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The World's Most Ruthless Food Startup: The Inside Story of How HelloFresh Clawed Its Way to the Top

Inc.  print

2018-06-28

HelloFresh blew past 100 competitors to become the No. 1 meal-kit company on the planet. The German startup is winning--but not by playing nice.

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Upstart meal-kit companies may need a new recipe for growth

The Economist  print

2018-04-14

Competition from supermarket chains is eating into their profits

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The Wayfair Riddle

The Wall Street Journal  print

2018-02-12

A recent study by marketing professors Daniel McCarthy of Emory University and Peter Fader of the University of Pennsylvania’s Wharton School found that Wayfair spends about $69 to acquire each new customer, but only earns $59 back from each acquisition. Using a method of valuing publicly traded retailers that focuses on customer retention, Professors McCarthy and Fader conclude that Wayfair is overvalued by 84%.

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Subscription Businesses Are Booming. Here’s How to Value Them

Harvard Business Review  online

2017-12-19

While there are no cut and dry solutions, the customer-based corporate valuation methodology can help both businesses and investors to better understand the value associated with a subscription-based model.

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A new study shows Wayfair is losing money...

Markets Insider  online

2017-09-27

In a lengthy paper released late last week, Daniel McCarthy, an assistant professor of marketing at Emory University, and Peter Fader, a marketing professor at Wharton, present a new method of valuing publicly-traded retailers that focuses on customer retention. Wayfair is an unfortunate guinea pig example.

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Blue Apron Holdings Inc. is struggling to win over investors in its initial public offering, a disappointing development for a U.S. IPO market that has been on the rebound.

The Wall Street Journal  online

2017-06-28

Blue Apron Holdings Inc. is struggling to win over investors in its initial public offering, a disappointing development for a U.S. IPO market that has been on the rebound.

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Blue Apron Slashes Potential IPO Price; Blame Amazon and Whole Foods?

Barron’s  online

2017-06-28

Looming competition and weak fundamentals seem to have put a damper on Blue Apron’s IPO plans.

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