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You are spot on, all you are doing to hiding and showing, if you can see it with fetch as googlebot you have no problems.

Chris, So far as I know this is not an issue. If I'm not mistaken, you have it set-up so that the registrar is pointing multiple domains to your host IP and you're maintaining all of your sites within one cPanel (or one parent directory). If that's the case, it's OK. I asked a similar question several months back and the general consensus seems to have been that it's not going to effect rankings as long as a majority of the links are not coming from the same IP block. I think this kind of piggybacks on the whole 'link farming' problem that was popular amongst Black Hat SEOs back in 2009-2010. For some additional insight, check out the discussion here: http://www.seomoz.org/q/managing-multiple-websites-via-add-on-domain.

Nevermind - saw the link now....duh....

It would have been Panda 3.3 2/27/2012

We just discovered that one of our clients' sites (not one we manage, but another one of theirs) has approximately 7000 links coming from luxa.org, and they recently took a huge dip in organic traffic. Is anyone else familiar with luxa.org?