Why Did Rick Scott Buy 2 Million Shares of Quepasa.com

Florida social conservative Daid Caton made a big stick about gubernatorial candidate Rick Scott owning shares of the Hispanic social networking site Quepasa.com.

"That is what Rick Scott said just three months ago, not ten years. So Rick Scott must believe that profiting from his investment in a company that lures women into the porn industry and connects same-sex partners for relationships is also something ingrained in him from the Boy Scouts and church as "the right thing to do everyday."

Quepasa Corporation is the owner of Quepasa.com. The corporation's capital has shrunk by over 50 percent.

Once high-flying Quepasa Corporation (AMEX: QPSA), which runs a social networking site focused on the Hispanic community, has been decimated over the last month, losing 50% of its market cap between January 27 and March 4. Prior to that, however, QPSA's market cap had doubled in almost as short of a period. The initial move higher in the stock coincided with the hype surrounding the LinkedIn IPO as well as the ever increasing private market value of Facebook.

One of the board members of Quepasa Corporation is Alonso Ancira. In 1999, Ancira fled Mexico because of tax fraud charges. It turns out that Quepasa Corporation was funnelling money from Altos Hornos de Mexico and Mexicans & Americans Trading Together, Inc., to increase its quarterly earning reports. Ancira is the chairman of AHMSA and MATT.

The Security and Exchange Commision finding on Quepasa's revenue stream.

“Substantially all of our revenue has been generated from or arranged by AHMSA and MATT Inc., which are companies affiliated with Mr. Alonso Ancira, a director of Quepasa.”

Together, AHMSA and MATT controlled 40 percent of Quepasa Corp. Rick Scott's shares gave him 13.8 of Quepasa Corp. Scott started buying shares in Quepasa Corp in 2006. Scott spokesman Brian Burgess couldn't say if the governor still owned shares or if it was part of a blind trust.

"Mr. Scott will move his money into a blind trust and will remove himself from the decision-making when it comes to his investments," Scott spokesman Brian Burgess told WESH, though he admitted that he couldn't guarantee that the new fund wouldn't continue to invest in QuePasa or Playboy, for that matter.

Scott started investing in Quepasa Corp in 2006. Scott would have bought the stock dirt cheap. The stock became inflated because of Ancira transferring money from his other companies into Quepasa Corp. The question is did Scott sell his shares before the stock tanked. If Scott knew the stock would tank , in advance, then there are questions of insider trading.

The question is why would Scott buy 2 million shares of a Hispanic social networking site that wasn't popular with Hispanics. Ian Bezek made a table of the Quepasa.com amongst Hispanic people in several countries. Bezek ranked the popularity of Quepasa.com against other social network sites.

In Mexico, Quepasa.com is the 74th most popular social network web site. Facebook is second. Myspace is 60th.

In Agentina, Quepasa.com 469th most popular social network web site. Facebook is first. Myspace is 134th.

In the United States, Quepasa.com is the 7669 most popular social network web site.

In short, Quepasa.com isn't even a second tier social network. An important question are did Scott sell his shares before the stock tanked. If not, then did Scott set up a blind trust. Scott's office has been evasive about whether or not the governor has set up a blind trust.

Are we to believe that Scott would buy 2 million shares of an unpopular social network, without knowing the history of Ancira's tax troubles or the company's revenue stream? Color me skeptical.