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Let's discuss Andrew Rosener's idea of owners bidding in auctions

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To give the idea it's own thread let's discuss the idea put forth by Andrew Rosener of @MediaOptions that owners would be allowed to bid on their own domain names at auction.

Andrew never stated to do it secretly or against an existing platform's TOS.

I don't see what Andrew sees, let's say I have a 4L.com Rayy.com, there are a bunch of backorders at $69 and the name is at $300 with Andrew in the lead.

I think $300 sucks, so I bid Andrew up, he counters back and this goes on in traditional bidding war style to $1,800. For this hypothetical no one else jumped in so it's just me the owner vs Andrew. I obviously have an advantage, I try to get Andrew to go to $1900 so I bid $1850 he has to go to $1900 to take the lead. He doesn't he says too much for that name I'll pass. I will the auction at NameJet. I pay them $1,850 and they send me back 90% of the $1,850.

I was certainly in an advantageous position compared to Andrew, without me, the owner, he wins at $300. No other person bid, only the person with a vested interest, the owner bid.

I have proposed a few exotic type auction ideas here at Namepros over the years, some have been allowed, some haven't. One I proposed that @Eric Lyon thought was interesting but decided against (I had no problem with that). Was an owner clawback option, where the owner does not participate in the auction but if it closes say at $500, the owner could say I want to callback my name and pay the winning bidder say 10 or 20%.

In that example the market would be fair, everyone bidding upfront would know that the owner had the option to clawback the name. It would be better than a reserve auction because there would be some monetary gain for participating and being top bidder as opposed to bidding all day on GoDaddy, not meeting reserve and the high bidder has nothing to show for their effort.

Just my opinion, what is your opinion?
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
This isn't even funny. Is Rosener making a mockery of himself? Such a flimsy argument!

When a domain owner bids on a name to "save" his domain, 99% of the bidders there aren't aware that the current owner is bidding on it to save the domain. They believe that this domain is more valuable to some potential buyer. This gap in information is the problem.

The seller could set a reserve - which is a simple solution. Else the seller should mention while bidding for his own domain "This bid is by the Seller himself to save the domain". Will Rosener do this?
 
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if the owner is bidding on a name....it artifically inflates the price for everyone. then there really is no reason for a reserve or anything else that goes with an auction. everyone loses the buyer and seller. the only winner is namejet. So all these monthly auction amounts I wont how much of it is fake and owners paying for their own names. the only way to do something if have a do not bid week or month each year. no one bids on any aution for the entire week as sign of disgust. this leaves only one true auction flippa.
 
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To give the idea it's own thread let's discuss the idea put forth by Andrew Rosener of @MediaOptions that owners would be allowed to bid on their own domain names at auction.

Andrew never stated to do it secretly or against an existing platform's TOS.

I don't see what Andrew sees, let's say I have a 4L.com Rayy.com, there are a bunch of backorders at $69 and the name is at $300 with Andrew in the lead.

I think $300 sucks, so I bid Andrew up, he counters back and this goes on in traditional bidding war style to $1,800. For this hypothetical no one else jumped in so it's just me the owner vs Andrew. I obviously have an advantage, I try to get Andrew to go to $1900 so I bid $1850 he has to go to $1900 to take the lead. He doesn't he says too much for that name I'll pass. I will the auction at NameJet. I pay them $1,850 and they send me back 90% of the $1,850.

I was certainly in an advantageous position compared to Andrew, without me, the owner, he wins at $300. No other person bid, only the person with a vested interest, the owner bid.

I have proposed a few exotic type auction ideas here at Namepros over the years, some have been allowed, some haven't. One I proposed that @Eric Lyon thought was interesting but decided against (I had no problem with that). Was an owner clawback option, where the owner does not participate in the auction but if it closes say at $500, the owner could say I want to callback my name and pay the winning bidder say 10 or 20%.

In that example the market would be fair, everyone bidding upfront would know that the owner had the option to clawback the name. It would be better than a reserve auction because there would be some monetary gain for participating and being top bidder as opposed to bidding all day on GoDaddy, not meeting reserve and the high bidder has nothing to show for their effort.

Just my opinion, what is your opinion?
So basically it cost you 185 bucks to win your own auction , so you lost 185 this is the risk you took ,it could have been in a friend or families account and been legal ,I don't see the big deal ,Wall street does this to keep their assets liquid ,so why not here ,How many times on ebay does the buyer bid on his own stuff so he doesent get 5 cents on the dollar. in the end he has to pay commissions if he wins his own lot ,but he will save on paypal fees. As long as the auction does not get squashed after the closing bell its ok . In the end the seller paid 10% to find out what his domain is worth wholesale if Andrew is buying it. Times that by 20X and that the retail price the master would want for it.
 
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Reserve, or no reserve - neither prevents shill bids entering the auction on the current NJ format. Until the auction method is changed, these issues will continue to plague the industry. Rogue sellers who shill will just mask IPs with VPNs and randomise bidding tactics.

Im not agreeing that sellers should be bidding on open-ascending (English) auctions as @MediaOptions suggests, but on a first price sealed bid format, the sellers single bid becomes the reserve. Shilling is also much less advantageous/useful to the seller if the commission fee structure is based on a percentage of their own bid.

Interesting idea/suggestion...

How about this one also...

Include the option to have a "Seller buy back" option...so basically lets say, I am selling my domain on auction... MYDOMAIN.COM... bidding gets to $500.. but I actually want $5000 ... there is no reserve and the higest bidder is @Wannabean with $500.. then when the auction closes, there can be an option where the seller can make an offer to the buyer to buy the domain back at 10% MORE than what the buyer just paid for it... (or 15% or 20% or whatever)...and if he agrees then seller pays buyer and the domain doesn't change hands... buyer wins cos he made a profit....seller wins cos he saved his domain...marketplace wins cos they get their commission...industry wins cos it curbs shilling....EVERYONE WINS

I like one component of what @Nikul Sanghvi described -- that the seller openly proclaims his/her "bid," which is in a sense a reserve price they are placing as insurance.

And @deez007 's "buy-back" option also made my ears perk up, but that could lead to a terrible experience for a motivated buyer.

All in all, I end up circling back to the same place, a place where none of this really sustains long-term and the overall benefits to all involved (esp. the buyers) are questionable.

These threads and subsequent debates are very good to have, imo. We (as an industry) need to vastly overhaul the auction process -- albeit, within the control that is even possible, and all the while knowing there is no perfect solution (as of yet). Doesn't mean we cannot ask for platforms to do better.

I think a TLDR version of the above is...ideas need to be shared and to percolate, but the domain owner participating in an auction will always end up arousing suspicion and mistrust (at least for some involved, so that's bad for the rest of us in the end).

So what can be done as a whole? Let the ideas continue...

Unfortunately, the ability to eradicate *all* shill bidding, anywhere, is virtually impossible. This problem goes far beyond a single user creating multiple accounts. Different human beings with unique identities and accounts can still collude, despite acting on their own accord otherwise. Friends bidding, etc.

I remember, when I was still with Flippa, despite the best efforts of the security team, beefing-up these kinds of KYC ("Know Your Customer") checks, which various financial institutions as well as other trusted outlets (like AirBnB) require, was met with mistrust and hostility. So stringent ID verification is frustrating...and may reduce participation due to these concerns/constraints (and increase paranoia over your personal information floating in the ether)...

...but if you demand too-lenient a security check, nothing gets resolved.

Friction-less market efficiency is a tough nut to crack, but keeping in line with the industry-wide necessity to increase security measures (checks, verifications, et al), I also highly believe in the need for a monetary disincentive for those who may be scheming.

As others have mentioned, a deposit would likely be a good first step in that direction.

I'd recommend a minimum deposit be collected, just to participate.

Meaning: you want your bidding account to be in *active* standing? You place $500, maybe more?, into the system.

You get caught bidding in a suspicious manner? That money is held, if not lost outright.

You walk away from a winning bid? That money is lost.

Those that don't have a revolving $500 to "invest" in this manner need not apply.

This would require everyone be on the same page about this minimum level of sacrifice, as well as an agreed-upon level of personal information to confirm (i.e. KYC checks, bank account or credit card legitimacy, anti-fraud checks, etc etc).

Again, shill bidding will never be able to be eradicated *outright*, but the ability to make it much more difficult and less financially rewarding should be a priority of every single auction platform.
 
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I like one component of what @Nikul Sanghvi described -- that the seller openly proclaims his/her "bid," which is in a sense a reserve price they are placing as insurance.

And @deez007 's "buy-back" option also made my ears perk up, but that could lead to a terrible experience for a motivated buyer.

All in all, I end up circling back to the same place, a place where none of this really sustains long-term and the overall benefits to all involved (esp. the buyers) are questionable.

These threads and subsequent debates are very good to have, imo. We (as an industry) need to vastly overhaul the auction process -- albeit, within the control that is even possible, and all the while knowing there is no perfect solution (as of yet). Doesn't mean we cannot ask for platforms to do better.

I think a TLDR version of the above is...ideas need to be shared and to percolate, but the domain owner participating in an auction will always end up arousing suspicion and mistrust (at least for some involved, so that's bad for the rest of us in the end).

So what can be done as a whole? Let the ideas continue...

Unfortunately, the ability to eradicate *all* shill bidding, anywhere, is virtually impossible. This problem goes far beyond a single user creating multiple accounts. Different human beings with unique identities and accounts can still collude, despite acting on their own accord otherwise. Friends bidding, etc.

I remember, when I was still with Flippa, despite the best efforts of the security team, beefing-up these kinds of KYC ("Know Your Customer") checks, which various financial institutions as well as other trusted outlets (like AirBnB) require, was met with mistrust and hostility. So stringent ID verification is frustrating...and may reduce participation due to these concerns/constraints (and increase paranoia over your personal information floating in the ether)...

...but if you demand too-lenient a security check, nothing gets resolved.

Friction-less market efficiency is a tough nut to crack, but keeping in line with the industry-wide necessity to increase security measures (checks, verifications, et al), I also highly believe in the need for a monetary disincentive for those who may be scheming.

As others have mentioned, a deposit would likely be a good first step in that direction.

I'd recommend a minimum deposit be collected, just to participate.

Meaning: you want your bidding account to be in *active* standing? You place $500, maybe more?, into the system.

You get caught bidding in a suspicious manner? That money is held, if not lost outright.

You walk away from a winning bid? That money is lost.

Those that don't have a revolving $500 to "invest" in this manner need not apply.

This would require everyone be on the same page about this minimum level of sacrifice, as well as an agreed-upon level of personal information to confirm (i.e. KYC checks, bank account or credit card legitimacy, anti-fraud checks, etc etc).

Again, shill bidding will never be able to be eradicated *outright*, but the ability to make it much more difficult and less financially rewarding should be a priority of every single auction platform.

What @deez007 Was an auction concept I proposed here last year, that if the price doesn't go as high as you would like there is a clawback option, where the high bidder would receive a 10 or 20% payment of their high bid. Some liked it, more didn't.
 
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What @deez007 Was an auction concept I proposed here last year, that if the price doesn't go as high as you would like there is a clawback option, where the high bidder would receive a 10 or 20% payment of their high bid. Some liked it, more didn't.
At a MINIMUM, that consolation payment would have to be paid by the owner of the domain; but regardless, this could be a vastly frustrating experience for buyers, even if they got paid to lose.

I also think this could be gamed / abused...
 
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At a MINIMUM, that consolation payment would have to be paid by the owner of the domain; but regardless, this could be a vastly frustrating experience for buyers, even if they got paid to lose.

I also think this could be gamed / abused...

Of course it has to be paid by the owner, and this was being proposed for here where not many four and five figure sales take place.

Everything can be gamed and abused, welcome to planet Earth.
 
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The owner being able to bid will put off potential buyers just by the notion of it. The ethics just doesnt make sense. However the need behind the concept is there and here is my suggestion (which needs fine-tuning) and which I'll be implementing on my marketplace DNMania.com.

1) There will be NO no-reserve auctions because there is always a cost to the seller.
2) Once your domains are listed they are open to 'OFFERS' from potential buyers. This is like a lazy auction where offers come in and the list of offers can be viewed and the offer bids increased.
3) The seller if willing to sell now that he has seen some offers on his domain has to push the asset to a 7-day auction with a reserve price. The reserve price is never hidden and cannot be changed by the seller.
4) All offers above the reserve price will become automatically auction bids and will show up in the auction.
5) An active auction has no set end time coz the auction end time gets pushed 15-minutes to 1-hour (depending on price range) so a potential buyer always has time to put in his final bid and the seller always gets the best price for his asset.
6) Since this whole issue blew up I've been thinking of a 'Right to Refusal' feature with compensation given to top 2 bidders and the marketplace but I'm not sure if it is more a pain than anything helpful.

Oh yeah and this will be a commission free marketplace where the income from ads and membership accounts will be more than enough to run it. Free membership for all accounts who have 10/20/50 (undecided) or less domain assets. Controlling quality of domains in the marketplace is a big concern for me and I've been contemplating ways of peer-monitoring of assets or premium account holders being able to weed out bad assets.

best,
Anita
 
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Definitely not a fan of the clawback / right to refusal / buyback - especially if there is already a reserve in place. It creates a mechanism that gives the seller an unfair advantage and creates an element of doubt for the buyer, even if they get some notional compensation.

The purpose of the auction is to create an exchange of assets: money in exchange for domain. Any potential hinderance that prevents that exchange will negatively affect the bidding behaviours of the buyers.

If a marketplace is designed to deliver maximum value for buyer (without disadvantage for the seller), it will by default deliver maximum (natural) yield for sellers. Trust, transparency and integrity (no post-auction surprises for the buyer) means repeat business and over time, more bidders/buyers.
 
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Definitely not a fan of the clawback / right to refusal / buyback - especially if there is already a reserve in place. It creates a mechanism that gives the seller an unfair advantage and creates an element of doubt for the buyer, even if they get some notional compensation.

The purpose of the auction is to create an exchange of assets: money in exchange for domain. Any potential hinderance that prevents that exchange will negatively affect the bidding behaviours of the buyers.

If a marketplace is designed to deliver maximum value for buyer (without disadvantage for the seller), it will by default deliver maximum (natural) yield for sellers. Trust, transparency and integrity (no post-auction surprises for the buyer) means repeat business and over time, more bidders/buyers.

Well said, I agree... the buyer is the main person and hidden surprises are not good on the whole.
 
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However, as far as I know, seller bidding on a no reserve auction is not legal. The courts have already decided it. And Media Options was specifically talking about seller bidding on a no reserve auction.

As a proposal. Very big difference in proposing something and actually doing it...

Agree. But he is "proposing" something which is the very actual definition of shill bidding as decided by the courts which is not right IMO.

I don't believe the courts address exactly what Andrew is proposing. Shill bidding is the scenario when a seller bids on an auction WITHOUT the knowledge of other bidders. Andrew has explicitly stated that the seller must be know and it must be obvious to other participants that the seller is bidding as well.

At first glimpse, this auction looks fine.

http://www.namejet.com/Pages/Auctions/StandardDetails.aspx?auctionid=3786053
upload_2017-10-23_17-17-24.png


Then you notice the seller account. MediaOptions

AND

Unless you know [knew] that Bidder: Seafoodman is FeaturedAuction: MediaOptions you wouldn't know [have known] that he is bidding [bid] on his own domain(s) at no reserve auction(s).

upload_2017-10-23_17-39-43.png
 
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We salute those that work hard to make the world and domaining more honest and accountable.
Thanks @Grilled Praise Cheeses!
 
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This is very very fishy, did you uncover another Shill bidder?

"Then you notice the seller account. MediaOptions

AND

Unless you know [knew] that Bidder: Seafoodman is FeaturedAuction: MediaOptions you wouldn't know [have known] that he is bidding [bid] on his own domain(s) at no reserve auction(s)."
 
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This is very very fishy, did you uncover another Shill bidder?

I suppose that depends on your definition of a shill bidder. I've been told simply bidding on one of your own listings could be argued an honest mistake.

How many times must one bid on their own auctions before its safe to call them a shill bidder?

It was reported that Oliver Hoger's seek account bid on at least 148 of his own auctions, and he's still allowed to sell on namejet using at least three featured auctions nonetheless. HERE Yet, according to NameJet terms of service, shill bidding isn't allowed. So I'm not sure if they draw the line at 149 times, if an exception was made, or...

Are there mitigating circumstances and/or acceptable excuses for these occurrences?
 
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What @deez007 Was an auction concept I proposed here last year, that if the price doesn't go as high as you would like there is a clawback option, where the high bidder would receive a 10 or 20% payment of their high bid. Some liked it, more didn't.

The devil, as always, is in the details. At the winners option, they could sell it back to the owner for +100% of the selling price. ie the seller pays the buyer the winning price and keeps the domain. Don't namby pamby around with 10 or 20%. Make it worth the winning bidders' while to even consider selling it back to the seller.
 
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Just set a reserve then. That is the point of a reserve auction.
Actively bidding vs. the domain owner for their own domain is ridiculous in my view.

Brad

I don't like the idea. Set a reserve or take a chance. The thought is similar to live auction houses calling ghost bids in the audience in an attempt to get real bids. It's a poor way to operate imo.

Auctions are not active negotiations between buyers and sellers. The seller sets the parameters and the final sales price is determined by the buyers in the open market. Having sellers involved in the bidding process allows these sellers to potentially create an artificial market. If there is a concern over the risk of a loss, use a reserve auction. If you as a seller need to be more involved than just setting a reserve, an auction is not for you.

Wait a minute guys... say the seller bids under their reserve, and even though they bid up their own auction, they didn't bid past their hidden reserve. If the winning bid is still under the reserve, and no transaction occurs, what's the harm in sellers bidding up their own auctions if there is no direct and/or seemingly immediate victim? Also, if the auction house's technology allowed sellers to bid on their own auctions, doesn't that make it OK?

Here's an example:
Notice Seafoodman first bid occurs (I think) less than 20 minutes prior to the auction ending. Maybe he bid under the reserve to start a last minute bidding war? Because after his bid, (in under 20 minutes) the auction shot up another $2k+ to $4,910 and the $2500-$5000 reserve still wasn't hit. So even though Seafoodman bid on his own auction, his bid was void due to not hitting reserve. Nobody would assume that since a domain was bid up to $4,900 (by multiple bidders) and it still didn't hit sellers reserve, then the domain must be worth at least $4,900... or would they?

http://www.namejet.com/Pages/Auctions/StandardDetails.aspx?auctionid=3896389
upload_2017-10-23_23-34-0.png


5_qn73iymfBxFqNn0kvbkO3Oqn0OMJCHuvI7nOO-dlH7bz8-MeAvY3u7nNr8oyCpKKBIOUCXl5vzX0MwGlrX5PLmBxSJJ6smTcs6VY2-qPZN1APY56weNI5psKaKGX3nspLE=s0-d-e1-ft



It's not like we're talking about a newbie either. We're talking about a 2015 inductee to the domain industry Hall of Fame, and a consecutive winner of domain broker of the year. LINK HERE
 
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In my book this is appalling...people should stop using NJ until they really clean up their marketplace or implement better and more effective rules.
 
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In my book this is appalling...

It might be a lot worse. Without an internal audit from NameJet and/or a government entity, it's nearly impossible to figure out the full scope. I'll post more about these irregularities at a later date.

Here's an example of a seller bidding, and winning their own no reserve auction:

http://www.namejet.com/Pages/Auctions/StandardDetails.aspx?auctionid=3791399
upload_2017-10-24_0-51-55.png


CMmm2rmMJc0ydLB27mqgCZnMfp7Hn4JbiM6ZfcFIqKJH2WHcrfE8lE4zz0qvycYiwWJqmwxgS9KmBJ-vmVARYWawgHtDXNtOd59jc0ZNvK_eNbOEP6Pk0aMCEpDci1fxbQQX=s0-d-e1-ft



About four months later, this domain again sells on NameJet. This time it sells to a bidder from the first auction (where MediaOptions bid on and won their own listing) for $125. Is it possible Seafoodman's previous sale/purchase price of $131 played a part into the winning bidder's willingness to pay $125 for this (less than one year old) hand regged 6N.com?

http://www.namejet.com/Pages/Auctions/StandardDetails.aspx?auctionid=3838680
upload_2017-10-24_1-1-55.png
 
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Wait a minute guys... say the seller bids under their reserve, and even though they bid up their own auction, they didn't bid past their hidden reserve. If the winning bid is still under the reserve, and no transaction occurs, what's the harm in sellers bidding up their own auctions if there is no direct and/or seemingly immediate victim? Also, if the auction house's technology allowed sellers to bid on their own auctions, doesn't that make it OK?

spot on Grilled. this is another "side effect" from shill bidding. even if you don't hit reserve, shill bidding activity draws attention to an auction. it creates fake interest and may induce someone to make a bid.

we know how we all as humans behave. we tend to follow others, specially in bullish times.

what is astonishing to me is how guys like him are lured into the dark side. but then again, he's human, and subject to greed and overconfidence/impunity. the worst "criminal" here is NameJet by allowing this to happen, which can only be done intentionally given the recurrent pattern and their reply that they monitor their systems and are against shill bidding.

i guess in the end money talks in every business...
 
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this is another "side effect" from shill bidding. even if you don't hit reserve, shill bidding activity draws attention to an auction. it creates fake interest and may induce someone to make a bid.

we know how we all as humans behave. we tend to follow others, specially in bullish times.

Great explanation!

Here's an emmy worthy video explanation of shill bidding.

 
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what is astonishing to me is how guys like him are lured into the dark side. but then again, he's human, and subject to greed and overconfidence/impunity. the worst "criminal" here is NameJet by allowing this to happen, which can only be done intentionally given the recurrent pattern and their reply that they monitor their systems and are against shill bidding.

I think people of his caliber, influence and cash availability are not drawn to the dark side...they create it, or at least contribute to create it.

NJ is as guilty and I strongly believe everyone should stop using them; once their cash flow is reduced by 70-80% something significant will be done.
 
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Notice Seafoodman first bid occurs (I think) less than 20 minutes prior to the auction ending. Maybe he bid under the reserve to start a last minute bidding war? Because after his bid, (in under 20 minutes) the auction shot up another $2k+ to $4,910 and the $2500-$5000 reserve still wasn't hit. So even though Seafoodman bid on his own auction, his bid was void due to not hitting reserve. Nobody would assume that since a domain was bid up to $4,900 (by multiple bidders) and it still didn't hit sellers reserve, then the domain must be worth at least $4,900... or would they?

Is SeaFoodman confirmed to be Andrew Rosener/MediaOption rep? I might have missed this connection (if it was mentioned earlier on the thread. I've not gone back and re-read the entire thread)
 
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Is SeaFoodman confirmed to be Andrew Rosener/MediaOption rep? I might have missed this connection (if it was mentioned earlier on the thread. I've not gone back and re-read the entire thread


Ashampoo_Snap_2017.10.25_00h03m37s_001_.png
 
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