This company has been public for over three years now; it first began trading on May 18, 2005 after a reverse merger and the closing price that day was $0.10 on 198,300 shares traded. On Friday, August 22, 2008 the shares closed at $0.035 on 112,940 shares traded. The 52 week high was $0.28 and the low, $0.03. The average daily volume for the past three months has been 358,000 shares, but on certain days in January 2006, millions of shares exchanged hands with as many as 3.3 million shares traded one day. Since the company is a pink sheeter, unfortunately, there are no financials for us to review. What then drives this stock, which has never traded above $0.80 in 39 months? We went searching for the answer on the company's website, which is difficult to find, because it is HipHopSodaShop™ not H3 Enterprises, Inc.! And in our opinion that, in a nutshell, tells the story!
There is a lot of fizz and pizzaz on the web site, but no substantive financial information. You can watch a rap video, but cannot find a P&L statement; you can see flashy advertisements for upcoming events at their stores, but there is no list of stores; and you can read 44 press releases (issued since September 10, 2007, at the rate of almost one per week!) but you can not find their Balance Sheet or Cash Flow Statement. In other words...lots of fizz, but no substance!
On the website, the company describes itself as "the first publicly traded Hip-Hop company" and that it "is dedicated to the mission of empowering young people through investment, education and economic development." It goes on to say that management is committed to: maximizing shareholder returns, generating positive growth of the entire community through business, educational and investment opportunities, and creating a business focused on "feeding the worldwide demand for everything hip-hop." Up until this last goal, it sounds like "motherhood and apple pie" who could possibly object to such lofty management goals. Well we question that last goal, because we are unsure exactly how large the worldwide demand for everything hip-hop actually is.
From the company's actions to date and its lack of disclosure as to financial results, we guess that such demand might be pretty limited. From our reading of the information on their website, HipHopSodaShop™ is a franchise and H3 Enterprises, Inc., is the franchisor. It also appears that there are only two stores that have been opened to date, the first one in Tampa late last year and the other in Miami, several months ago, but we are unable to confirm that information, as the Store Section of the website is "underdevelopment."
This past Friday, HTRE announced that the company had launched H3GameLine.com, which it describes as "the premier online video gaming pay to play website with over two hundred pre-registered members."
What, if anything, this business has to do with opening franchised Hip-Hop soda shops remains to be seen. We also wonder how that business fits in with empowering young people through investment, education and economic development. In the meantime this most recent "weekly" announcement adds more fizz to the offerings of H3, and maybe, just maybe....that's all there is folks!
REFERENCES:
H3 Enterprises
H3 Gameline
Miami Opening
Tampa Opening
HipHopSodaShop on YouTube
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