Meet Group Inc (MEET)

[Chance To See]

cjg, maybe it's the "Important Disclosures"

I went back to check if they had put the “Important Disclosures” section in the previous earnings PR’s and I couldn’t find any previous earnings PRs, so I guess this is their first. I’m glad they included this:

“Important Disclosures
Approximately 96% of the revenues for the nine months ended September 30, 2010 came from two companies of which a director of Quepasa is an officer or director.”

 
 $  4,199,846   9 months revenue 
    x    0.96   
 - - - - - - -  
 $  4,031,852  96% 
    
 $  4,199,846    
 $ (4,031,852)   
 - - - - - - - - - - 
 $    167,994   4% 
 

So about $167,994 is from non-Ancira sources, which presumably is the UFC DSM program and something from SnapMeUp. As far as I know, this is the company’s first “real” revenue and is an important milestone. I wish they had highlighted that aspect instead of trumpeting the related-party revenue from Ancira. I hope they will break out the amounts from each source in the 10Q, which doesn’t seem to be out yet.

They also say, "Our Quepasa DSM product continues to gain traction with advertisers and brands seeking to deliver their brand message across all social media properties…" I hope this is true. They keep saying this, but we still don't see it in the financial results and they haven’t announced any DSM contracts from third parties other than UFC.

++++++++++++++

I realized yesterday, after mostly missing a big run-up in BSDM (a company I have followed for years but have some concerns about) that it’s important to see both the positives and negatives – but even more important to weigh them correctly. I have plenty of concerns about Quepasa’s propensity to mislead about these “revenues” but the positives outweigh these concerns enough to allow QPSA to be my second-largest holding.