Latest / What the Flux / REA Group's UK expansion plans | Abercrombie & Fitch is back from the dead | Airtrunk hits the M&A jackpot

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REA Group's UK expansion plans | Abercrombie & Fitch is back from the dead | Airtrunk hits the M&A jackpot · What the Flux

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  Speaker 1: This is what of Flux. I'm Brett and I'm justin
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  Speaker 1: and it's Wednesday, the fourth of September.
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  Speaker 2: Does it wait? It's believed that Katar Airways is just
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  Speaker 2: days away from finalizing a deal to acquire a minority
• 0:15
  Speaker 2: stake in Virgin Australia and given bondser and directs have
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  Speaker 2: collapsed recently, it could give Virgin Australia the firepower to
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  Speaker 2: bring it to Quantus and Jetstar.
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  Speaker 1: Here in Australia, we desperately need someone to fire up
• 0:27
  Speaker 1: this domestic battle. Uh huh, buck Sam. We are now
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  Speaker 1: just seven weeks away from the cutoff to submit your
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  Speaker 1: tax return for last financial year. If you don't submit
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  Speaker 1: by October thirty first this year, you could face a
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  Speaker 1: large fine. And that's why we've released a new article
• 0:39
  Speaker 1: in the Flux out taking you step by step through
• 0:41
  Speaker 1: what you need to do to semit your tax return
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  Speaker 1: on the magap websites. Make sure to check it out
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  Speaker 1: on the Flux app for more info.
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  Speaker 2: Three informative stories Today Jessy Boy Let's do it for
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  Speaker 2: our first. Aria Group has announced that it's considering acquiring
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  Speaker 2: right Move for nine billion dollars, the UK's largest digital
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  Speaker 2: property platform Aria.
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  Speaker 1: The new mister Worldwide b Man, So tell me more.
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  Speaker 2: Well, Jazyboy. Aria Group is the listed real estate ad
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  Speaker 2: company that's behind real estate dot com dot Au, which
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  Speaker 2: is Australia's largest property website.
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  Speaker 1: The place where you can look for joint properties well
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  Speaker 1: outside your price range.
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  Speaker 2: Now Aria also owns other companies in that space. I'd
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  Speaker 2: be thinking Realcommercial dot com dot Au, Flatmates, Mortgage Choice and.
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  Speaker 1: Its majority owned by News Corp Australia.
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  Speaker 2: Now. Aria Group has just announced that it's considering putting
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  Speaker 2: forward an offer to acquire the UK's largest digital property platform,
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  Speaker 2: which goes by the name of right Move.
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  Speaker 1: The offer would be in cash and shares, but by
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  Speaker 1: Babe Man, it's yet to actually approach right Move with
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  Speaker 1: an offer.
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  Speaker 2: And Josie Boy. This deal is likely to cost over
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  Speaker 2: nine billion bucks and would turn Aria Group into a
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  Speaker 2: global powerhouse in the real estate market.
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  Speaker 1: But interestingly, after the announcement, Right Move share price shut
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  Speaker 1: up twenty seven percent, but Aria share price dropped over
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  Speaker 1: five percent. So what is the key learning here?
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  Speaker 2: Acquisitions can often shake investor confidence before they build up
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  Speaker 2: investor confidence.
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  Speaker 1: Well. Right Move share price jumped at the acquisition announcement.
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  Speaker 1: Clearly Aria's investors were less keen interesting called juzzy voice,
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  Speaker 1: So why is that? Well for starters, the two companies
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  Speaker 1: have grown at very different rates Recently.
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  Speaker 2: Aria has grown over twenty five percent in the past
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  Speaker 2: year and Right Move has actually dropped by one percent.
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  Speaker 1: Not to mention that Australian companies haven't quite had the
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  Speaker 1: best track record with expanding into the UK recently.
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  Speaker 2: A few that come to mind West Farmers, Lend Lease Amp.
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  Speaker 2: They all tried and more or less failed to expand
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  Speaker 2: into the UK and be Man.
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  Speaker 1: This isn't the first time we've seen a split reaction
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  Speaker 1: to an acquisition announcement.
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  Speaker 2: Remember when West Farmers announced it was looking to acquire API,
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  Speaker 2: which is the owner of Price Line, back in twenty
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  Speaker 2: twenty one, I do West.
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  Speaker 1: Farmer's share price remained largely flat, but API's share price
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  Speaker 1: jumped seventeen percent after the announcement.
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  Speaker 2: So Jazi boy. Clearly Aria is testing the market here
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  Speaker 2: just to see whether investors are supportive before making their
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  Speaker 2: big move.
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  Speaker 1: For our second story, Abercrombie and Fitch, the ninety teen retailer,
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  Speaker 1: has seen its quarterly sales jumped over one billion US
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  Speaker 1: dollars after doing a major repamp to its brand.
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  Speaker 2: That is a serious blasts from the past, does it, boy?
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  Speaker 2: Reminds me of the good time? So tell me more.
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  Speaker 1: Okay. So Abercumbri and Fitch actually started back in eighteen
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  Speaker 1: ninety two when they focus on outdoor and sporting goods.
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  Speaker 1: We were talking fishing rods, fishing boats, tents.
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  Speaker 2: But in nineteen eighty eight, Abercrombie and Fitch was acquired
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  Speaker 2: by L Brands, which also owned Victoria's Secret.
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  Speaker 1: And Abercrombie really leaned into the teen boppy culture of
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  Speaker 1: the nineties.
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  Speaker 2: They literally had topless male models at the entrance of
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  Speaker 2: their stores dripping in Abercrombie after shade.
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  Speaker 1: And the big Abercrombie logo on each of their T
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  Speaker 1: shirts and jumpers was actually the size of my head.
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  Speaker 2: In the early two thousands, Abercrombie faced a heap of controversy.
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  Speaker 1: We're talking staff discrimination claims.
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  Speaker 2: It was titled America's most hated brand.
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  Speaker 1: But b man. In twenty nineteen, Abercrombie overhauled its product
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  Speaker 1: and its marketing to distance itself from itself.
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  Speaker 2: AH and more recently, just over the past two years,
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  Speaker 2: Abercrombius made a major comeback.
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  Speaker 1: In fact, it's now seen its net sales jumped to
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  Speaker 1: over one point one billion US dollars for the quarter,
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  Speaker 1: and it expects to continue growing in the coming quarters.
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  Speaker 1: But despite this, its share pros actually dropped seven teen
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  Speaker 1: percent because it warned of a potentially uncertain environment.
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  Speaker 2: Fascinating. Fascinating, So what's the key learning here?
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  Speaker 1: For some retailers, the best way to maintain relevance is
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  Speaker 1: to evolve with your customers. Now.
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  Speaker 2: In the past ten brands like Abercrombie, they focused on
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  Speaker 2: things like type jeans or oversized hoodies or graphic teas.
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  Speaker 1: But when fashion trends changed as well as societal expectations,
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  Speaker 1: Abercrombie failed to keep up with the youth market.
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  Speaker 2: And they not only lost their existing customers, but the
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  Speaker 2: next generation as well.
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  Speaker 1: So now brands like Abercrombie are redamping their clothes to
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  Speaker 1: cater to more style needs.
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  Speaker 2: For example, it ain't low cut jeans anymore, but officewar
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  Speaker 2: and wedding clothes.
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  Speaker 1: And be man. It's clearly working because Abercrombie share prices
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  Speaker 1: jump more than five hundred and twenty percent since the
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  Speaker 1: start of twenty twenty three.
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  Speaker 2: Yep, But They're not the only ones. Their rival American
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  Speaker 2: Eagle also reported record revenue of one point twenty nine
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  Speaker 2: billion US dollars for the quarter, and GAP also beat
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  Speaker 2: its estimates as well.
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  Speaker 1: So it's back to the future.
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  Speaker 2: For our third and final story. Air Trunk, the Australian
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  Speaker 2: data center group, has been sold for over twenty three
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  Speaker 2: billion dollars after twelve month auction that actually got quite heated.
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  Speaker 1: I'd keep telling you, b man, data centers are the
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  Speaker 1: new oil. Keep telling you that, so tell me more.
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  Speaker 2: Now. You may have heard of air Trunk, only nine
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  Speaker 2: years old.
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  Speaker 1: YEP. Found it in twenty fifteen. It had the goal
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  Speaker 1: of developing and operating hyperscale data centers.
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  Speaker 2: Now these hyperscale data centers are larger than your typical
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  Speaker 2: enterprise data center.
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  Speaker 1: YEP, more than five thousand servers in the one large place.
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  Speaker 2: And Jasi boy. Since twenty fifteen, air Trunk has built
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  Speaker 2: eleven hyperscale data centers and that's across Australia, Singapore, Japan,
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  Speaker 2: Hong Kong.
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  Speaker 1: Now be back. In twenty twenty, a group led by
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  Speaker 1: mcquarie's Infrastructure Fund acquired an eighty eight percent share in
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  Speaker 1: air Trunk.
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  Speaker 2: Had a valuation of about three billion bucks.
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  Speaker 1: But over the past few years, data centers have blown up.
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  Speaker 2: Yep, every man, every woman, and every dog is looking
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  Speaker 2: for data centers to manage cloud computing and AI applications.
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  Speaker 2: And now, after a twelve month auction, air Trunk has
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  Speaker 2: been sold to private equity firm Blackstone for a waften
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  Speaker 2: twenty three and a half billion.
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  Speaker 1: Bucks and b man this sale will set a new
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  Speaker 1: valuation benchmark for other data center.
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  Speaker 2: Businesses to interesting. So what is the key learning here?
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  Speaker 1: When a high profile acquisition takes place, it can establish
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  Speaker 1: a new benchmark for all companies in the sector.
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  Speaker 2: Just like property auctions, buyers and sellers use the most
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  Speaker 2: recent results as a reference point for negotiations.
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  Speaker 1: And given the enormous price tag on air Truck, they
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  Speaker 1: may also see their valuation reassessed by investors.
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  Speaker 2: Does it boy? Air Trunk reportedly generated one billion dollars
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  Speaker 2: in earnings before interest, tax, depreciation and amortization.
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  Speaker 1: This acquisition is at twenty three and a half times
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  Speaker 1: it's EBITDAT So deal like this can have a huge
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  Speaker 1: impact on the broader data center market. Absolutely, FLEXPAM there
• 6:32
  Speaker 1: is no worse feeling than getting to the end of
• 6:34
  Speaker 1: October and realizing you still haven't done your tax return,
• 6:37
  Speaker 1: so make sure you get on top of it. With
• 6:38
  Speaker 1: a step by step guide in the Flux app on
• 6:40
  Speaker 1: how to submit your tax return on the mag Up website.
• 6:43
  Speaker 1: You will not regret it.
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  Speaker 2: Thanks for listening, and we'll see you on Friday.