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  "documentTitle": "Qutoutiao, Inc. (QTT)",
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  "presentationDate": "2020-01-17 00:00:00",
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  "notes": "This is a page from a research report (Page 13 of 23). It uses a 'preempt_rebuttal' and 'expose_contradiction' approach to dismantle QTT's defense of its loyalty program.",
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      "text": "We would argue that QTT's business model is inherently reliant on fake user growth and fake traffic, as monetary incentives replace genuine engagement; how many real DAUs would QTT retain if it stopped paying them?",
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      "text": "1. QTT awards users 'loyalty points' which are redeemable for cash. Most loyalty programs don't work this way because it is horrifically expensive. 2. Loyalty programs employed by airlines, hotels, restaurants, etc. require the customer/user to purchase things to earn loyalty points.",
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      "text": "We would argue that QTT's business model is inherently reliant on fake user growth and fake traffic, as monetary incentives replace genuine engagement; how many real DAUs would QTT retain if it stopped paying them?",
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      "text": "8. QTT's explanation of the economics of its 'loyalty program' only included the 'user engagement' portion of its loyalty program expenses, which our analysis of QTT's filings shows, accounts for less than half of its total loyalty program expenses:",
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      "text": "The author's allegations regarding our loyalty program are the unfortunate result of not understanding our business. The author does not at the least take due care to quote the correct financial figures...",
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      "text": "\"The author's allegations regarding our loyalty program are the unfortunate result of not understanding our business. The author does not at the least take due care to quote the correct financial figures, as the author claims that 'as of Q2 2019, trailing twelve-month loyalty program expenses totaled $701.8 million, or 100.2% of its SEC reported revenue', while our reported figures were RMB 2,074 million (or approximately USD 300 million), or 43% of SEC reported revenue.\" — QTT's response to our report.",
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