CLCT - Collectors Universe

[Lupo Lupus]

Collectors Universe provides authentication services for coins and memorabilia. Simple business and they are a market leader in it. They got punished by the market (50% price drop) because they cut the dividend by one-half (citing expansion reasons). Also latest quarter was very weak.

 

The price drop can potentially be explained by dividend investors selling out. So classic case of shifting of investor clienteles.

 

Pros

• Company is very cash generative, free cash flow regularly exceeds profits

• Higher profits in future due to US tax cut (someone estimated this at 2mln)

• Management owns good amount of stock, they may initiate buyback opportunistically (as they have done in the past) following the drop

 

Negs

• The obvious: the recent weak quarter may be structural. It is also a bit odd that they announced the dividend reduction (which management argues to be connected to lower cash levels and expansion plans) in the same quarter where they take a hit on profits. This may suggest that the dividend reduction may rather be driven by the lower profits.

• My main quibble with the business model is that certification is permanent (ie, once certified no reason to certify again). At some point all interested collectors will have their coins certified. Of course, they are also new coins coming into the market...but demand for product may fall off.

 

There is also an older write-up of the company on investingsidekick

http://investingsidekick.com/collectors-universe-nasdaqclct/

 

I bought a position. Anyone else following this one?

 

[SlowAppreciation]

I’ve followed it and liked it for a while for the reasons you mentioned.

 

The recent drop has certainly piqued my interest. But I also don’t know a single person who still collects cards, coins, or autographs. Does the business fall off a cliff in 30 years, or is it much sooner? I don’t really know.

[Cigarbutt]

CLCT is a company I looked at a lot a few years ago. Thanks for the post as it had come off my radar, sort of.

 

The first part of the evaluation has to do with industry dynamics. Their focus has been coins and trading cards authentication/grading. Not personally familiar with the collectibles industry but did a fair bit of research and scuttlebutt. Participants (buyers and sellers) are part traders, « investors » and true collectors. Participants are part of a minority of people who seem to be unusually committed (even a passion for many). The market is relatively large, fragmented, un-regulated and has been relatively non-transparent (price wise) until the advent of web-based exchanges and independent qualified valuation experts (such as CLCT in their niche markets).

 

To help get a feel for the collectors, here are some helpful links:

https://is.muni.cz/el/1456/jaro2014/BPV_CMME/46836843/AssociationMeasuring_Returns_on_Investments_in_Collectibles.pdf

https://www.collectors.com/

 

The second link is provided by CLCT and may be helpful to get a sense of what industry participants may be looking for. I think the industry has a future that is correlated to what CLCT can offer as a useful intermediate.

 

Bottom line:

Based on a normalized free cash flow yield and adjusted for my definition of the business risk associated with the model and taking into account the interest rate environment, I come to a “fair” value of +/- 15$ per share.

 

Here are some comments that complement the opinion.

 

Overall, CLCT has become a market leader in their own spaces but the pricing power is relatively hard to evaluate as relevant competitors are privately owned. Over the years, management has tried to enter and participate in related markets but I submit that the moves have not been value accretive. When I looked at CLCT about 4 or 5 years ago, I realized that there had been two opportunities when the enterprise value was more than market value (more on that later) and submit that now is not such an opportunity (more on that later).

 

The company was founded (by Mr. DG Hall, who is President and Director and another person) in 1986 and was able to become a market leader in specific areas and it was then very well positioned to meet increasing demand that occurred concurrently with the rise in online sales (eBay etc) in the early 2000’s. However, they were also involved in auctions and direct sales and that component was a drag on profitability. In late 2003 and early 2004, they sold that part in order to focus on their core profitable operations. In that context, retrospectively looking, CLCT was an opportunity as shares traded at less than 50% of intrinsic value. The market cap was small and I assume that the company was not well known. In a typical move by top management (superior capital allocation management in terms of value extraction from the market --over time, it has been a good idea to side with Mr. Hall in terms of increasing or decreasing ownership--), in 2005, a secondary IPO was done when, prospects looked better, at a premium to IV (17,50$ per share) with a part of the proceeds going to the two founders, The cash amassed within the firm was out of proportion to operational needs even if expansion plans were taken into account.

 

Then the company got into the field of diamond and colored gemstones appraisal and grading. The dynamics were different and CLCT was not able to reach a profitable scale. This realization (and the need to divest) came at the same time as general market distress in 2008-9. Interestingly, in 2009, CLCT eliminated a relatively small dividend it had started in 2006 and, as the shares traded at about cash and equivalents per share, without taking account the fact that there was no debt and that the underlying free cash flow generating franchise (coins, cards, autographs etc) was intact (!), and within months, (July 2009) closed a Dutch Auction repurchasing 19% of shares outstanding at 5$ per share (!). Mr. Hall was once again on the right side of the trade as absolute and relative ownership increased significantly for him.

By re-focusing on core operations, CLCT did well after that episode and, since year 2010, it has distributed 10,83$ per share (maybe excessive, see later). However, since 2014-5, CLCT has been again looking for ways to grow, this time, by increasing its international presence, mostly on China mainland. In order to decide if investing in CLCT in February 2018 makes sense, one has to come up with an assessment of the validity of the venture; my opinion (could be very wrong here) is that the international foray is likely to be disappointing.

 

Recently CLCT announced, after a relatively weak quarter (trend to come?) that the quarterly dividend was reduced by 50%. That came as a surprise to the market and the share price has suffered. So, opportunity?

 

When you look at the capital flows since 2011, many conclusions stand out.

 

-The underlying core business requires very little capital to maintain significant (stable or slow growing) free cash flow generation.

 

-CLCT has distributed more than can be sustained (IMO). Cash and cash equivalents---) 2011:21,9  2012:21,2  2013:18,7  2014:19,9  2015:17,3  2016:12,0  2017:9,8  after last Q2: 5,7 (net).

 

-Recently cash flow was used for a new headquarter (often a big question mark)…

http://investors.collectors.com/news-releases/news-release-details/big-growth-bigger-building-collectors-universe

 

Mr. Hall has been decreasing his level of ownership and may approach retirement (age 71).

 

The new CEO is an insider and apparently an avid collector but this aspect is mostly uncharted territory.

 

My take is that it may be reasonable to see how the international venture plays out and to invest if the underlying core operations moat is maintained. Obviously, if this occurs during a generalized downturn, then it may get really interesting even if the beta risk suggests otherwise. :)

 

Since founding, CLCT has authenticated and graded more than 65 million collectible items and that will continue. But a sensible entry point is a prerequisite.

 

Final comment: outside of my circle, but it seems to me this is an area where blockchain technology may eventually disrupt the moat.

 

[LC]

Small cap value classic.

 

Has key man risk written all over it.

[Foreign Tuffett]

Small cap value classic.

 

Has key man risk written all over it.

 

I actually think it's the exact opposite. There are poorly disclosed related-party transactions involving David Hall and his associates and family members.

[DTEJD1997]

CLCT is a company I looked at a lot a few years ago. Thanks for the post as it had come off my radar, sort of.

 

Since founding, CLCT has authenticated and graded more than 65 million collectible items and that will continue. But a sensible entry point is a prerequisite.

 

Final comment: outside of my circle, but it seems to me this is an area where blockchain technology may eventually disrupt the moat.

 

How would blockchain technology disrupt the moat?  With CLCT, you've got expert appraisers evaluating the condition of an item and giving it a grade (slabbing of coins).

 

When you "slab" a coin, it is sent in physically for an evaluation/grading.  It is assigned a grade and then encased in a tamper proof plastic case.  It is given a grade and serial # (maybe block chain memorializes ownership transfers?)  That would not undercut the grading function of CLCT.

 

Am I missing something here?

[Cigarbutt]

DTEJD1997,

The question about blockchain was open ended and had to do with potential threats.

I understand that there is a potential disruption in the art market.

Example:

https://www.artnome.com/news/2017/12/22/the-blockchain-art-market-is-here

 

In terms of the need for physical displacement of objects and in person appraisal, recently my kids asked me what was meant by a personal signature endorsement of a cheque as they photographed the cheque with their smartphones, thereby completing an e-deposit. :)

They also told me that wearing a watch was the next big thing.

Need somebody to fill in the blanks.

[DTEJD1997]

DTEJD1997,

The question about blockchain was open ended and had to do with potential threats.

I understand that there is a potential disruption in the art market.

Example:

https://www.artnome.com/news/2017/12/22/the-blockchain-art-market-is-here

 

In terms of the need for physical displacement of objects and in person appraisal, recently my kids asked me what was meant by a personal signature endorsement of a cheque as they photographed the cheque with their smartphones, thereby completing an e-deposit. :)

They also told me that wearing a watch was the next big thing.

Need somebody to fill in the blanks.

 

Cigarbutt:

 

Thank you for the link to that article.  I checked it out...but what am I missing about "blockchain technology"?

 

The article was discussing blockchain technology for digital art....pieces of art designed, stored & distributed on computers.  The article was discussing how difficult this is for the art market, as pieces can be easily reproduced/counterfeited.  Thus, blockchain can keep track of who owns what and when for "digital" art.

 

How does this have anything to do with a $20 St. Gaudens gold coin that is graded MS-62?

 

If you have the coin in your possession, you are the owner...kind of like a bearer instrument.

 

The "slabbing" & grading solve the counterfeiting problem.

 

So is blockchain technology going to keep track of who owned what coin at what point in time?

 

If so, I am not so sure that the coin market is looking for this type of "solution".  A lot of these people want to be off the grid.  They want no record of who owns what and when...for a variety of reasons.

[Cigarbutt]

Really, I'm not the one who should pursue this discussion and I do understand that many "collectors", in a way, see collectibles as an alternative form of currency...

 

So, maybe that's why a distributed ledger held and updated independently could provide the advantage of  secure transactions while keeping transparency level compatible with anonymity and confidentiality that participants value.

 

For all I know, CLCT could integrate somehow this hypothetical network (conceptually, that's what happened with eBay, to a certain extent, with great benefits in terms of scale of reach). I wish a third party with knowledge could help here.

 

A rapid search I just did shows interesting possibilities in the global diamond industry.

 

Threat, opportunity or naught?

 

[Foreign Tuffett]

I've been attempting to do some in-depth work here, but it's a tough name to analyze since there aren't any publicly traded comps and the business model has lots of moving pieces. If there is anyone out there who's done serious work on this I'd be more than happy to compare notes and compare thoughts. Send me a PM if you're interested.

[Broeb22]

Foreign Tuffett,

 

As one guide to your research, while I agree that there are few if any direct comps, one way to think about this business is for companies that solve the problem it is solving.

 

In its 10-K, CLCT does a good job explaining how collectors without a grading service would inevitably argue over perceived quality of coins/cards. So, having an unbiased source to assess coins/cards helps minimize the inevitable gaps between buyers and sellers. It's not perfect, because some will not agree with CLCT's grades, but its better than the alternative.

 

I've always thought about this as the Moody's or S&P of card and coin grading. It's business model, in my opinion, is very similar to them. It's returns on capital are similarly very high.

 

Other similar names: the credit scoring agencies (FICO, EFX, Transunion)

 

[Foreign Tuffett]

I like CLCT's business model. However, contra what the consensus seems to be, I actually think the company is not particularly friendly to outside shareholders. I submit the following as evidence:

 

David Hall Rare Coins ("DHRCC") is owned by David Hall and Van Simmons, two co-founders and board members of CLCT. DHRCC rents space in CLCT's California HQ. As CLCT's President, David Hall is paid a $500K annual salary. Keep in mind that this can't be more than a part time job for him, since he's literally running another business out of the same building. Also, having a rare coin dealing business based in the same building as a coin grading business is an inherent conflict of interest. Does the CEO of Moody's operate a bond trading business that is based in Moody's HQ?

 

David Hall and Van Simmons are gaming the coin grading system that they played very prominent roles in designing. The following quotes are from the FY 2017 10-K:

 

1) "We generally issue an authenticity or grading warranty with every coin and trading card authenticated or graded by us. Under the terms of the warranty, in general, if a coin or trading card that was authenticated or graded by us later receives a lower grade upon resubmission to us for grading, or is found not to be authentic, we are obligated under our warranty either to purchase the coin or trading card at the current market value at the originally assigned grade or, instead, at the customer’s option, to pay the difference in the current market value of the item between its original assigned grade and its lower grade."

 

2) "During fiscal years 2017, 2016 and 2015.....the Company paid to DHRCC, approximately $2,800, $4,100, and $96,400, of warranty claims, respectively."

 

In FY 2015 the warranty payments DHRCC received were nearly 1/6 of all the warranty payments CLCT paid out.

 

 

[SlowAppreciation]

https://valueinvestorsclub.com/idea/COLLECTORS_UNIVERSE_INC/141763

 

The first one, http://www.legendnumismatics.com/market-reports/farwell-2017/, which was written on 12/22/2017, states: “We can not remember in our 40 years of being full time coin dealers a more turbulent year. What makes it even more crazy-Legend Numismatics was close to a record year of sales. Every month was feast or famine. In December, we totally ran out of coins and our sales slumped to a horrifying number UNDER $1 million dollars.” Therefore, the volatility of sales between CLCT’s most recent two quarters (the first of which was very strong and the second of which was weak) was also seen by other players in the industry and was not unique to CLCT.

 

The second post, http://www.legendnumismatics.com/market-reports/bull-market-beginning/, which was written on 2/3/2018, states: “After all the stress and worry, we ended up having a far better then expected January. From what we heard from our peers, most did as well. The near shut down of Nov-Dec is still fresh in everyone’s mind. So it would not have taken much to recover-but everyone’s numbers (including ours) were still stronger then expected.” Assuming this is an industry phenomenon, then CLCT should also be experiencing a recovery. The article goes on to make an interesting connection between the stock market and coin market that “The last time this happened-2008 when the stock market really melted down, the rare coin market went on a 2-3 year tear upwards.  We started to see really big mega collectors appear all over. Every day collectors entered in throngs. We see no reason this stock market shake out will not lead to a strong bull market in rare coins. The party is now officially over for stocks and the crowd will start to park their money elsewhere. Hard assets ALWAYS see a share of the money. Real quality rare coins are cheap today.”

[Foreign Tuffett]

https://valueinvestorsclub.com/idea/COLLECTORS_UNIVERSE_INC/141763

 

The author of that VIC article seems willfully oblivious to the fact that the hyperbolic coin dealer he uses uses to build his case has a completely different business model than CLCT. The coin dealer is attempting to profit via the spread between its "wants lists" (aka the price and what is sells the coins to its customers for. It's basically a primitive and lumpy form of market making. While it is true that the vintage coin market has been slow, the results of a single coin dealer really don't mean much IMO.

 

I'm on the fence about CLCT. It has a great capital light business mode. But the board isn't particularly friendly to outside shareholders, and China, which has been the growth engine of the company over the last several years, is a black box of trapped cash.

[SlowAppreciation]

https://valueinvestorsclub.com/idea/COLLECTORS_UNIVERSE_INC/141763

 

The author of that VIC article seems willfully oblivious to the fact that the hyperbolic coin dealer he uses uses to build his case has a completely different business model than CLCT. The coin dealer is attempting to profit via the spread between its "wants lists" (aka the price and what is sells the coins to its customers for. It's basically a primitive and lumpy form of market making. While it is true that the vintage coin market has been slow, the results of a single coin dealer really don't mean much IMO.

 

 

But doesn't CLCT make money on activity? Kind of like how IBKR would do better at times of extreme buying/selling in the market (i.e.,volatility), or how Moody's would do better when debt is being issued. More buying and selling of coins would benefit CLCT (though I guess once graded, no need to get it regraded).

[DTEJD1997]

https://valueinvestorsclub.com/idea/COLLECTORS_UNIVERSE_INC/141763

 

The author of that VIC article seems willfully oblivious to the fact that the hyperbolic coin dealer he uses uses to build his case has a completely different business model than CLCT. The coin dealer is attempting to profit via the spread between its "wants lists" (aka the price and what is sells the coins to its customers for. It's basically a primitive and lumpy form of market making. While it is true that the vintage coin market has been slow, the results of a single coin dealer really don't mean much IMO.

 

 

But doesn't CLCT make money on activity? Kind of like how IBKR would do better at times of extreme buying/selling in the market (i.e.,volatility), or how Moody's would do better when debt is being issued. More buying and selling of coins would benefit CLCT (though I guess once graded, no need to get it regraded).

You would be surprised at how many times some coins will be graded.

 

This will typically happen on VERY high end coins that are right on the edge of being a grade higher. 

 

For example: a MS-65 $20 St. Gaudens might be worth $30K.  A MS-64 might be worth $18k. If you've got an especially nice MS-64 coin...you might resubmit it in the hopes that you get a higher grade and make the jump to MS-65.  The $100 cost is totally worth it if you've got a 10% chance of hitting that MS-65 grade.

 

I've known of collectors/dealers doing this.

 

This regrading or "cracking" is generally only done on higher end coins.  The fees on higher end are of course substantially more than on lower value coins.

 

So CLCT might actually get a decent amount of $$$ from collectors/dealers doing this.

 

 

[SharperDingaan]

Couple of thoughts ...

 

While they have a great niche business, the management has essentially made the business uninvestable. It's a couple of folks who had a great idea 'way back when' & executed on it very well; but the niche has since been in the maturity stage for a long time. They haven't found a replacement idea despite repeated attempts, & have begun to asset strip via related party transactions. 

 

Their product is the slab & it's related warrantied authentication. In the art world this would be a letter from Mr 'X' of 'XYZ Institute' attesting that your Renior painting is genuine and not a fake. In the diamond world this would be a certificate (with spectrograph) attesting to the diamonds origin. With the 'appropriate' authentication, the item can be sold for much more.

 

They are really selling a 3 part product; the appraisal itself, the CLCT 'experience', and provenance as the 'story'. But put this on a blockchain ..... You could use the slab as the solution to the digital/physical fraud interface; use the blockchain to prove ownership provenance accross both time AND space; and use the building as a vault to warehouse the physical - and underpin lending/leasing to museums and galleries.

 

Imagine you live in an unstable country.

As & when you can, you travel to the US and buy the most expensive 'slabable' collectable that you can. Then arrange for storage in the CLCT vault, and permit CLCT to lease your collectable to a 'Hall of Fame' somewhere. As that collectable never entered your country local authorities cannot seize it, but if you ever have to run - you have a fully provenanced asset that you can sell outside of your country, any time you wish, from anywhere, and at full market value. Very appealing to a wide swathe of market, but it can't happen without your slab/blockchain solution ;)

 

SD

 

 

   

[eclecticvalue]

SharperDingaan- Sharp thoughts as always.

 

I am also thinking about the millennial and their collectible habits. The only collectibles that are popular right now are sneakers and streetwear. There are private companies that taking advantage of it such as Stockx and Goat.

 

[SlowAppreciation]

https://valueinvestorsclub.com/idea/COLLECTORS_UNIVERSE_INC/141763

 

The author of that VIC article seems willfully oblivious to the fact that the hyperbolic coin dealer he uses uses to build his case has a completely different business model than CLCT. The coin dealer is attempting to profit via the spread between its "wants lists" (aka the price and what is sells the coins to its customers for. It's basically a primitive and lumpy form of market making. While it is true that the vintage coin market has been slow, the results of a single coin dealer really don't mean much IMO.

 

 

But doesn't CLCT make money on activity? Kind of like how IBKR would do better at times of extreme buying/selling in the market (i.e.,volatility), or how Moody's would do better when debt is being issued. More buying and selling of coins would benefit CLCT (though I guess once graded, no need to get it regraded).

You would be surprised at how many times some coins will be graded.

 

This will typically happen on VERY high end coins that are right on the edge of being a grade higher. 

 

For example: a MS-65 $20 St. Gaudens might be worth $30K.  A MS-64 might be worth $18k. If you've got an especially nice MS-64 coin...you might resubmit it in the hopes that you get a higher grade and make the jump to MS-65.  The $100 cost is totally worth it if you've got a 10% chance of hitting that MS-65 grade.

 

I've known of collectors/dealers doing this.

 

This regrading or "cracking" is generally only done on higher end coins.  The fees on higher end are of course substantially more than on lower value coins.

 

So CLCT might actually get a decent amount of $$$ from collectors/dealers doing this.

 

Good info—thanks for this.

[SharperDingaan]

Collectables are cyclical, price routinely moves up and down.

 

There was a time when natural coloured diamonds were so cheap that they were substituted for more expensive gems. At the time, the diamonds were  fairly numerous, usually larger than their clear counterparts, were considered 'junk stones', and were typically selected to match the colour of the recipients eyes. Today heirloom jewelry from the late 1800s/early 1900s made with these diamonds is worth a fortune; as coloured diamonds are rare, & the diamonds can be certified to specific mines that have long since closed.

 

Similar story around Parisienne art-deco jewelry from the 1920's. It fell out of fashion in the early 30's, & could be picked up for pennies in many Paris street markets shortly after WWII. Today a good piece from a top jeweler of the time, costs more than a house.

 

Price may change, but quality is a constant.

 

SD

 

 

 

 

 

 

[Cigarbutt]

There have been questions raised about the long term viability of collectibles authentification and, for the majority, it may be difficult to get excited about the (neglected?) industry but the following is interesting:

 

http://globenewswire.com/news-release/2018/04/20/1483547/0/en/1952-Topps-Mickey-Mantle-Card-Sells-for-2-88-Million.html

 

At today's price (the card had 21 bids), this "1952 Topps Mickey Mantle #311 baseball card, graded Mint 9" would buy 9 BRK.A shares and would leave some change.

 

I guess the CLCT commision to be less than 1% of the auction price but they seem to have pricing power related to their "brand".

 

[Cigarbutt]

Another interesting example of hidden value, this time found in a box in an attic:

https://www.forbes.com/sites/davidseideman/2018/05/23/forgotten-since-1952-five-topps-mickey-mantle-cards-are-now-worth-1-million/#31ca6c43423b

 

With many things getting virtual or digitized, hard to appreciate the hype around old pictures.

But it's for real.

 

CLCT's authentification business with the PSA grading is somehow cyclical.

The coin market has been quite soft but the trading card business has done quite well with premium card prices being multilplied by +/- 10 in the last 10 years.

 

[Cigarbutt]

This was on the watch list but just got greatly "downgraded" because of the following announcement since, over time for CLCT, it has been profitable to follow the founder.

http://globenewswire.com/news-release/2018/09/19/1572803/0/en/Collectors-Universe-Announces-Departure-of-David-G-Hall-as-President-and-Chief-Operating-Officer.html

 

[Foreign Tuffett]

There is a small scandal brewing in the trading card space. Some unscrupulous people have been purchasing cards with edge damage or wear, trimming the edges, and then submitting (or resubmitting) them to the grading companies.

 

https://www.nytimes.com/2019/06/14/your-money/sports-card-alteration-fraud.html

 

Why does this matter for CLCT investors? CLCT guarantees that the cards and collectibles they grade are authentic and unaltered. Cards that have been trimmed are, by definition, altered from their original dimensions, even if only by a small fraction of an inch on one side. There is significant evidence that many trimmed cards submitted for grading have not been detected by CLCT.

 

Why should shareholders care? CLCT warranties its grading work. Presumably, someone in possession of a trimmed card that has been CLCT graded could submit the card for cash compensation.

 

CLCT's only comment on the situation so far is linked below:

 

https://forums.collectors.com/discussion/1020696/psa-s-response-to-recent-hobby-message-boards

 

There's a recent Seeking Alpha article that covers all this in more detail. It's behind their paywall now though, so I'm not going to link to it.

[Foreign Tuffett]

There is a small scandal brewing in the trading card space. Some unscrupulous people have been purchasing cards with edge damage or wear, trimming the edges, and then submitting (or resubmitting) them to the grading companies.

 

https://www.nytimes.com/2019/06/14/your-money/sports-card-alteration-fraud.html

 

Why does this matter for CLCT investors? CLCT guarantees that the cards and collectibles they grade are authentic and unaltered. Cards that have been trimmed are, by definition, altered from their original dimensions, even if only by a small fraction of an inch on one side. There is significant evidence that many trimmed cards submitted for grading have not been detected by CLCT.

 

Why should shareholders care? CLCT warranties its grading work. Presumably, someone in possession of a trimmed card that has been CLCT graded could submit the card for cash compensation.

 

CLCT's only comment on the situation so far is linked below:

 

https://forums.collectors.com/discussion/1020696/psa-s-response-to-recent-hobby-message-boards

 

There's a recent Seeking Alpha article that covers all this in more detail. It's behind their paywall now though, so I'm not going to link to it.

 

FBI now involved. To be clear, the FBI probably isn't investigating CLCT directly, nor does it seem likely that  CLCT did anything illegal or unethical. The issue for CLCT is that it failed during the grading process to detect cards with trimmed edges. At least in theory, holders of these cards should be entitled to warranty claims. 

 

https://www.messenger-inquirer.com/sports/national/fbi-investigating-baseball-card-trading-fraud/article_d20ee4d4-8d55-53fd-82ec-8e42f30f0ae3.html