Tag Archives: Initial Public Offerings

SoftBank turns towards WeWork’s dad or mum CEO Neumann: sources

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(Reuters) – Japan’s SoftBank Group Corp (9984.T), the largest investor in WeWork proprietor The We Firm, is exploring methods to exchange Adam Neumann as chief government of the U.S. office-sharing start-up, 4 folks aware of the matter mentioned on Sunday.

FILE PHOTO: Adam Neumann, CEO of WeWork, speaks to visitors throughout the TechCrunch Disrupt occasion in Manhattan, in New York Metropolis, NY, U.S. Might 15, 2017. REUTERS/Eduardo Munoz -/File Photograph

The uncommon showdown between SoftBank and considered one of its largest investments comes after We Firm postponed its preliminary public providing (IPO) final week, following pushback from perspective traders, not simply over its widening losses, but additionally over Neumann’s unusually agency grip on the corporate.

This was a blow for SoftBank, which hoped for We Firm’s IPO to bolster its income because it seeks to woo traders for its second $108 billion Imaginative and prescient Fund. It invested in We Firm at a $47 billion valuation in January, but inventory market investor skepticism led to the startup contemplating a possible valuation within the IPO earlier this month of as little as $10 billion, Reuters reported.

Administrators on We Firm’s seven-member board which are aligned with SoftBank are deliberating learn how to exchange Neumann as CEO, the sources mentioned. Benchmark Capital, one other huge investor in We Firm, would additionally like Neumann to step apart, one of many sources mentioned.

No problem to Neumann has but been tabled, the sources mentioned. A We Firm board assembly to debate Neumann’s future might be held as early as this week, one other of the sources mentioned.

One possibility that SoftBank is contemplating is asking Neumann to develop into interim CEO whereas a headhunting agency is employed to search out an exterior alternative, the primary supply mentioned.

The sources requested to not be recognized as a result of the matter is confidential. We Firm and SoftBank declined to remark, whereas Neumann and Benchmark Capital couldn’t be instantly reached for remark. The Wall Avenue Journal first reported on SoftBank exploring methods to exchange Neumann as CEO.

As co-founder of the We Firm, Neumann holds particular voting shares that allow him to dismiss dissident board administrators and shoot down any problem to his authority. Nonetheless, SoftBank may select to not again We Firm’s IPO or present it with extra funding. It has already funded the cash-burning start-up to the tune of $10 billion, and was discussing committing one other $1 billion to the IPO.

We Firm mentioned final week it’s aiming to develop into a publicly traded firm by the tip of the 12 months.

In an indication of the deteriorating relations between SoftBank and WeWork, Neumann didn’t take part in a gathering of executives of corporations backed by SoftBank that occurred in Pasadena, California, final week and was organized by SoftBank CEO Masayoshi Son, based on two folks aware of the matter.

Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; Extra reporting by Greg Roumeliotis in new York and Rishika Chatterjee in Bengaluru; Modifying by Sonya Hepinstall and Daniel Wallis

Our Requirements:The Thomson Reuters Belief Ideas.

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Trump says he doesn’t need struggle after assault on Saudi oil amenities

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WASHINGTON/DUBAI (Reuters) – U.S. President Donald Trump stated on Monday stated it appeared like Iran was behind assaults on oil vegetation in Saudi Arabia however burdened he didn’t need to go to struggle, because the assaults despatched oil costs hovering and raised fears of a brand new Center East battle.

Iran has rejected U.S. fees it was behind the strikes on Saturday that broken the world’s largest crude-processing plant and triggered the biggest soar in crude costs in many years.

Relations between the US and Iran have deteriorated since Trump pulled out of the Iran nuclear accord final yr and reimposed sanctions over Tehran’s nuclear and ballistic applications. Washington additionally needs to stress Tehran to finish its assist of regional proxy forces, together with in Yemen the place Saudi forces have been preventing Iran-backed Houthis for 4 years.

America was nonetheless investigating if Iran was behind the Saudi strikes, Trump stated, however “it’s definitely trying that manner at this second.”

Trump, who has spent a lot of his presidency making an attempt to disentangle the US from wars he inherited, made clear, nonetheless, he was not going to hurry into a brand new battle on behalf of Saudi Arabia.

“I’m any person that would love to not have struggle,” Trump stated.

A number of U.S. Cupboard members, together with Secretary of State Mike Pompeo and Vitality Secretary Rick Perry, have blamed Tehran for the strikes. Pompeo and others will journey to Saudi Arabia quickly, Trump stated.

A day after saying the US was “locked and loaded” to reply to the incident, Trump stated on Monday there was “no rush” to take action.

“We’ve got a whole lot of choices however I’m not taking a look at choices proper now. We need to discover definitively who did this,” he stated.

Iranian President Hassan Rouhani stated the strikes had been carried out by “Yemeni folks” retaliating for assaults by a Saudi-led navy coalition in a struggle with the Houthi motion.

“Yemeni persons are exercising their professional proper of protection,” Rouhani instructed reporters throughout a go to to Ankara.

Iranian Overseas Ministry spokesman Abbas Mousavi referred to as the allegations “unacceptable and completely baseless.”

The assaults lower 5% of world crude oil manufacturing.

Oil costs surged by as a lot as 19% after the incidents however later got here off their peaks. The intraday soar was the most important for the reason that 1990-91 Gulf disaster over Iraq’s invasion of Kuwait.

The market eased from its peak after Trump stated he would launch U.S. emergency provides and producers stated there have been sufficient shares saved up worldwide to make up for the shortfall. Costs had been round 12% larger by afternoon in the US.

SAUDI SUSPICIONS

Saudi Arabia stated the assaults had been carried out with Iranian weapons, including that it was able to responding forcefully and urging U.N. consultants to assist examine the raid.

Crown Prince Mohammed bin Salman stated Iranian threats weren’t solely directed towards the dominion however towards the Center East and the world.

Whereas the prince didn’t immediately accuse Tehran, a Overseas Ministry assertion reported him as calling on the worldwide group to sentence whoever was behind the strike.

“The dominion is able to defending its land and folks and responding forcefully to these assaults,” the assertion added.

Saudi Arabia and Iran have been enemies for many years and are preventing quite a lot of proxy wars.

Trump stated he had not made commitments to guard the Saudis.

A satellite tv for pc picture displaying injury to grease/gasoline Saudi Aramco infrastructure at Khurais, in Saudi Arabia on this handout image launched by the usGovernment September 15, 2019. U.S. Authorities/DigitalGlobe/Handout through REUTERS

“No, I haven’t promised Saudis that. We’ve got to sit down down with the Saudis and work one thing out,” he stated. “That was an assault on Saudi Arabia, and that wasn’t an assault on us. However we would definitely assist them.”

Two sources briefed on state oil firm Saudi Aramco’s operations instructed Reuters it’d take months for Saudi oil manufacturing to return to regular. Earlier estimates had advised it may take weeks.

Saudi Arabia stated it will be capable to meet oil clients’ demand from its ample storage, though some deliveries had been disrupted. At the very least 11 supertankers had been ready to load oil cargoes from Saudi ports, ship monitoring information confirmed on Monday.

RISING TENSIONS

Stress within the oil-producing Gulf area has dramatically escalated this yr after Trump imposed extreme U.S. sanctions on Iran geared toward halting its oil exports altogether.

For months, Iranian officers have issued veiled threats, saying that if Tehran is blocked from exporting oil, different international locations will be unable to take action both. However Iran has denied a task in particular assaults, together with bombings of tankers within the Gulf and former strikes claimed by the Houthis.

U.S. allies in Europe oppose Trump’s “most stress” technique, arguing that it gives no clear mechanism to resolve points, making a danger the enemies may stumble into struggle.

Trump has stated his aim is to drive Iran to barter a more durable settlement and has left open the opportunity of talks with Rouhani at an upcoming U.N. assembly. Iran says there may be no talks till Washington lifts sanctions.

U.N. Yemen envoy Martin Griffiths instructed the U.N. Safety Council on Monday it was “not fully clear” who was behind the strike however he stated it had elevated the possibilities of a regional battle.

However the U.S. ambassador to the world physique, Kelly Craft, stated rising info on the assaults “signifies that duty lies with Iran” and that there isn’t any proof the assault got here from Yemen.

Iran’s Yemeni allies have promised extra strikes to return. Houthi navy spokesman Yahya Sarea stated the group carried out Saturday’s predawn assault with drones, together with some powered by jet engines.

“We guarantee the Saudi regime that our lengthy arm can attain anyplace we select and on the time of our selecting,” Sarea tweeted. “We warn firms and foreigners towards being close to the vegetation that we struck as a result of they’re nonetheless in our sights.”

Slideshow (11 Pictures)

U.S. officers say they consider that the assaults got here from the wrong way, presumably from Iran itself reasonably than Yemen, and will have concerned cruise missiles. Wherever the assaults had been launched, nonetheless, they consider Iran is guilty.

The assaults have raised questions on how the dominion, one of many world’s high spenders on weaponry, a lot of it equipped by U.S. firms, was unable to guard oil vegetation from assault.

Sensing a business opening, President Vladimir Putin stated Russia was prepared to assist Saudi Arabia by offering Russian-made air protection techniques to guard Saudi infrastructure.

Russia and China stated it was unsuitable to leap to conclusions about who was guilty for the assault on Saudi Arabia.

Reporting by Steve Holland in Washington and Rania El Gamal in Dubai; Writing by William Maclean, Mike Collett-White and Doina Chiacu; Modifying by Alistair Bell and Peter Cooney

Our Requirements:The Thomson Reuters Belief Ideas.

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WeWork to listing shares on Nasdaq, scale back CEO’s voting energy

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WeWork’s mother or father firm introduced main modifications in its company governance practices Friday because it revealed plans to listing shares on the Nasdaq.

The office-sharing firm is urgent on with its extremely anticipated inventory market debut — anticipated later this month — regardless of doubts about its means to generate profits and selections which have raised dedication and battle of curiosity considerations about CEO Adam Neumann.

WeWork’s mother or father firm, The We Firm, stated it was reducing by half — to 10 per share from 20 — the voting energy of highest-class shares that Neumann and others would have after the IPO.

The corporate’s full board of administrators additionally can have the ability to take away the Neumann as CEO and appoint a successor, as an alternative of counting on a three-member board committee that will have included his spouse, Rebekah Neumann. Adam Neumann would nonetheless management a majority of its excellent voting energy, giving him the flexibility to dictate the end result of main selections.

The We Firm, introduced the modifications in a regulatory submitting Friday in response to market suggestions

Traders have proven lukewarm curiosity since WeWork outlined its IPO plans final month, portray an image of breakneck enlargement on the again of large losses, with no clear path to profitability.

The New York-based firm is contemplating pricing its shares within the IPO at valuation of between $15 billion and $20 billion, significantly much less the estimated $47 billion that non-public traders have assigned to it, in line with information experiences and a supply conversant in the discussions.

Neumann, a 40-year-old charismatic CEO who has been the face of the corporate, has created a stir by utilizing a few of his WeWork inventory to safe a $500 million private mortgage, and promoting a few of his shares. He has raised battle of curiosity considerations as a result of he owns 4 buildings that WeWork leases. And a backlash prompted Neumann to return $6 million that We Firm paid for the trademark “We.”

WeWork has stated Neumann wouldn’t promote any of his shares within the IPO providing, and wouldn’t promote greater than 10% of his shares for the following two years.

It stated Neumann will not purchase properties for the aim of leasing them to his personal firm. He will even give the corporate any income he makes from actual property transactions with WeWork.

“A few of these actions that he took simply left a foul style. Are you attempting to take advantage of this factor on your personal private revenue after which hand it off to another person?” stated Dan Morgan, senior portfolio supervisor for Synovus Belief.

The corporate plans to nominate two administrators, together with a lead impartial board member, throughout the subsequent 12 months and stated that no member of Neumann’s household will sit on the board. Earlier this month, it agreed to nominate a girl — Frances Frei, a professor at Harvard Enterprise Faculty — to its board when the IPO is full after going through backlash over its all-male board.

WeWork, which plans extra aggressive enlargement, has billions of {dollars} using on a profitable IPO. It struck a deal final month that will give it entry to $6 billion in financing raised by a bunch of banks, so long as it raises a minimum of $three billion within the IPO.

Based as a co-working house in Manhattan in 2010, WeWork now has 527,000 members in 111 cities all over the world. It principally makes cash by renting buildings and dividing them into workplace areas to sublet to members.

Its income has greater than doubled yearly over the previous few years, reaching $1.eight billion in 2018, however its losses have mounted virtually as shortly, reaching $1.6 billion final 12 months.

The model is in style with small companies, start-ups and freelancers who cannot afford everlasting workplace house. Members use an app to e book ready-made workplaces or desks and get entry to front-desk service, fashionable lounges, convention rooms, free espresso and different providers.

However its enterprise mannequin has not been examined in an financial downturn that would harm its members, whose lease dedication presently common 15 months. In the meantime, WeWork has a median dedication of 15 years on the buildings it leases.

WeWork’s location working bills quantity to about 80% of gross sales, and the corporate has given little indication of the way it may scale back its prices and finally flip a revenue, stated Morgan of Synovus Belief.

The corporate’s capital-intensive mannequin has contributed to views that WeWork must be valued extra like an actual property firm than a know-how agency, stated Brent Glover, an affiliate professor of finance at Carnegie Mellon’s Tepper Faculty of Finance.

“They’ve long-term obligations. That is commonplace actual property mannequin, very completely different than a software program firm,” Glover stated.

WeWork’s $47 billion personal valuation quantities to 25 instances gross sales, in comparison with the typical market valuation of actual property firms at about six instances gross sales, Morgan stated.

———

This story has been up to date to right the quantity Neumann returned to the corporate for the “We” trademark. It was $6 million, not $6 billion.

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Uber posts largest quarterly loss ever after inventory payouts

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Uber misplaced $5.24 billion within the second quarter — its largest quarterly loss ever — after making big stock-based payouts within the months following its preliminary public providing.

The ride-hailing big stated Wednesday it paid $3.9 billion in stock-based compensation and bills through the quarter. It additionally paid $298 million in inventory and money to drivers to point out appreciation in reference to its IPO.

The loss per share together with these bills totaled $4.72 whereas income jumped 14% to $3.17 billion. Analysts surveyed by FactSet anticipated a lack of $2.03 per share on income of $3.31 billion, on common, however these analysts sometimes exclude one-time bills reminiscent of IPO-related prices.

Uber continued to spend closely on gross sales and advertising, which incorporates expensive promotions designed to draw riders and drivers. These bills grew to $1.22 billion, up 71% in comparison with final yr. The price of worth wars and retaining drivers whereas competing with rivals reminiscent of Lyft has been a pressure on its potential to show a revenue.

“We might push the corporate to interrupt even when we needed to, frankly, however I feel what you will note from us is…decrease losses going ahead whereas on the identical time we aggressively spend money on new progress levers,” stated Uber CEO Dara Khosrowshahi in a convention name with reporters. “However there is no doubt in my thoughts that finally the enterprise will probably be a break even and worthwhile enterprise.”

Khosrowshahi stated he expects 2019 to be the corporate’s peak loss yr and for the losses to be smaller over the following two years.

Khosrowshahi stated he is assured within the scale of Uber’s ridesharing enterprise and its technical capabilities. He doesn’t count on the Eats meals supply enterprise to be worthwhile subsequent yr or the yr after, however stated “I feel what we’ve is a good mixture of a trip enterprise that’s going to show extra worthwhile over the following couple years, that may enable us to take a position aggressively within the Eats enterprise and likewise carry a backside line that improves.”

Uber Applied sciences Inc.’s shares fell 6% in after-hours buying and selling.

Uber noticed double-digit income progress within the U.S., Europe, Center East, Africa and Asia Pacific areas, however income fell 24% to $417 million in Latin America.

Gross bookings, which is the entire greenback worth of rides and Uber Eats meals and the quantity paid by freight shippers, reached $15.76 billion, up 31% — or 37% in fixed foreign money — in contrast with the identical time final yr.

The variety of month-to-month lively Uber Eats customers grew greater than 140% in comparison with final yr, and greater than 40% of latest Eats prospects had by no means used Uber’s platform earlier than. The Eats enterprise is booming in Japan, Khosrowshahi stated.

Income for the Uber Eats service rose 72% to $595 million, whereas ridesharing income grew simply 2% to $2.35 billion due to the one-time driver appreciation funds, the corporate stated.

California lawmakers are pushing a invoice to categorise ridesharing drivers as staff. Khosrowshahi, on a convention name with buyers, stated he believes there’s a greater path ahead, the place drivers may very well be given minimal earnings, advantages and a voice in choices that have an effect on their livelihood.

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Uber gets hit again; shares below $40

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Uber shares sunk even further after its disappointing stock market debut as doubts lingered over the company’s ability to turn a profit and trade tensions dragged down the overall market.

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The ride-hailing giant’s stock fell 10% and hovered around $37 Monday afternoon on Uber‘s first full day of trading.

The mounting losses followed Uber’s disappointing initial public offering. On Friday, it took a $617 million hit — the largest loss on the first day of trading by a U.S.-based company in recent history, according to Renaissance Capital.

Uber’s earliest investors are still making money off the IPO, but “for late-round investors, it’s possible by the time they exit they will end up with a loss,” said Jay Ritter, finance professor at the University of South Florida.

Among the recent big investors — and perhaps losers — is PayPal, which had disclosed plans to buy $500 million in Uber stock at the IPO price of $45.

Uber has had no trouble convincing venture capitalists to pour money into its earlier funding rounds, but with its unclear path to profitability, it’s having a more difficult time with Wall Street investors.

“It’s clearly a high-risk, high-reward scenario. You’re betting on something that may happen 10 years down the road,” said Matt Kennedy, senior IPO market strategist at Renaissance Capital, a manager of IPO exchange traded funds. “Public investors are looking at profits and not seeing any, and the company’s growth in the last quarter was relatively strong, but I don’t think it blew anyone away.”

Uber’s main U.S. rival, Lyft, is in a similar spiral. Its stock was trading below $48 on Friday, down 33% from its IPO price of $72.

It’s rare to see shares in a tech company hit so hard upon going public. Over the past five years, just 10% of similar companies finished their first day of trading below their IPO price, Kennedy said.

Uber’s revenue last year surged 42% to $11.3 billion, but the company admits it could be years before it turns a profit.

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Uber looks to raise up to $9B in initial public offering

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Uber is planning to sell 180 million shares for between $44 and $50 each, valuing the ride-hailing giant lower than previous estimates in a sign of that some of the excitement around ride-hailing has cooled.

That would raise up to $9 billion for the San Francisco-based company, valuing Uber at an estimated $80.5 billion to $91.5 billion, compared with prior estimates that were as high as $120 billion.

The figures are likely to be revised as Uber gets feedback from potential investors in the coming weeks.

Uber also disclosed that PayPal plans to buy $500 million in stock at the IPO price, and that the companies will explore future commercial payment collaborations, including the development of Uber’s digital wallet.

Uber gave potential investors a first look at its finances this month, revealing nearly $8 billion in losses over a decade. That mirrors the challenges faced by its rival Lyft, which went public last month and saw its stock price rapidly decline.

But Uber also showed impressive growth. Its revenue totaled $11.3 billion in 2018, which was a 42% increase from $7.9 billion in 2017, and far above its $495 million revenue in 2014.

Both Uber and Lyft face an uncertain path to profitability as they deal with intense competition, high costs to pay drivers, increased regulation by cites and a long, uncertain road to the development of autonomous vehicles.

Uber also lost market share after a series of embarrassing revelations and has been working to repair its reputation.

Uber stockholders also will be selling 27 million shares if the underwriters exercise their option to purchase stock.

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Uber to kick off investor road show with IPO terms on Friday

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(Reuters) – Ride-hailing company Uber Technologies Inc will unveil terms for its initial public offering on Friday, telling investors it will seek to be valued at between $80 billion and $90 billion, according to people familiar with the matter.

The valuation sought is less than the $120 billion valuation that investment bankers told Uber last year it could fetch, and closer to the $76 billion valuation it attained in its last private fundraising round last year.

Uber’s moderation of valuation expectations reflects the poor stock performance of its smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Thursday down 22 percent from their IPO price amid investor skepticism over its path to profitability.

Uber will unveil on Friday an IPO price range of between $44 and $50 per share, based on which it would raise between $8 billion and $9 billion, the sources said. This would rank it as the largest IPO since that of Chinese e-commerce giant Alibaba Group Holding Ltd in 2014.

In addition, some Uber insiders will also sell their own shares in the IPO, the sources said. Reuters reported earlier this month that all the Uber shares sold in the IPO could be worth around $10 billion.

Uber also plans to unveil on Friday its last sale of stock as a private company, the sources said. The identity of the investor involved in the private placement could not immediately be learned.

The investor roadshow will kick off in earnest on Monday, setting the stage for Uber to debut on the New York Stock Exchange in early May.

For the roadshow, Uber’s top executives will travel the Unites States and make a stop in London to drum up investor interest in the IPO, sources said.

The sources asked not to be identified because the matter is confidential. Uber declined to comment. The price range was reported earlier by Bloomberg News.

Two other IPOs this month, those of online scrapbook company Pinterest Inc and video conferencing company Zoom Video Communications Inc, have performed much more strongly than Lyft. Uber, however, has chosen to still value itself conservatively.

“People are more cautious than they were 4 weeks ago,” said Duncan Davidson, general partner at Bullpen Capital, an early-stage venture capital investment firm.

Uber operates in more than 70 countries. In addition to ride hailing, its business includes bike and scooter rentals, freight hauling, food delivery, and an expensive self-driving car division.

The ride-hailing startup has disclosed it has 91 million users, but growth is slowing and it may never make a profit. Uber in 2018 had $11.3 billion in revenue, up around 42 percent over 2017, but below the 106 percent growth the prior year.

During the IPO roadshow, Uber’s chief executive, Dara Khosrowshahi, will be tasked with convincing investors that he has successfully changed the company’s culture and business practices after a series of embarrassing scandals over the last two years.

Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.

Uber is reserving some shares in the IPO for drivers who have completed 2,500 trips among other criteria.

AUTONOMOUS DRIVING

Last week, Uber’s autonomous vehicle unit raised $1 billion privately from a consortium of investors, including top Uber shareholder SoftBank Group Corp, giving the company a much-needed funding boost for its self-driving ambitions.

Last year, Uber settled a legal dispute over trade secrets with Alphabet Inc’s Waymo self-driving vehicle unit. Waymo, in its lawsuit, had said one of its former engineers who became chief of Uber’s self-driving car project took with him thousands of confidential documents.

FILE PHOTO: Uber’s logo is displayed on a mobile phone in London, Britain, September 14, 2018. REUTERS/Hannah Mckay

One advantage Uber will likely seek to play up to investors is that it is the largest player in many of the markets in which it operates. Analysts consider building scale crucial for Uber’s business model to become profitable.

Lyft, which was valued at $24.3 billion in its IPO, has focused only in the U.S. and Canadian markets.

“Investors are now asking for more clarity on how ride-sharing companies will monetize data they are collecting and if this is a scalable business,” said Jordan Stuart, a client portfolio manager for Federated Kaufmann funds who often purchases stock in IPOs.

Reporting by Joshua Franklin in New York and Heather Somerville in San Francisco; additional reporting by Jennifer Ablan in New York; editing by Bill Rigby, Meredith Mazzilli and Chris Reese

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