Riccardo Carta

H3 ENTERPRISES, INC. (HTRE.PK) HipHopSodaShopâ„¢: Is it all fizz and no substance?

by Riccardo Carta August 25, 2008
H3 ENTERPRISES, INC. (HTRE.PK) Hip-Hop Soda Shop: Is it all fizz and no substance?

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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


Comments 8

1. bill106
February 03, 2012, 04:13PM

Quotes This company is a perfect example of why some people are workers and some are owners. Here was a company that had so much potential to do well in the stock market. The people running this company should be fired and new ones that actually want to turn a profit should be put in place of them.

2. Guest
January 07, 2010, 11:53AM

Quotes I was so excited about hearing about the concept that I bought 20,000 shares through etrade. I live in Tampa so they really hyped it up during the supperbowl and It was a very cheap investment so I'm can't really complain, but I do have hopes that one day, the stocks will do better in the future.

3. Guest
May 22, 2009, 11:46AM

Quotes So what is up with all the haters? the last store is closing now where is all the support

4. Guest
January 29, 2009, 09:08AM

Quotes gw, why were they unable to open this store? is the company is such a bad condition at the moment?

5. Guest
January 12, 2009, 04:23PM

Quotes i saw 2 hip hop soda shops builings that were under construction. they either never opened or they went out of business within 2 months

6. Guest
September 06, 2008, 11:55PM

Quotes I agree with you. This guy calls himself a contributor? This is more like a half baked school report with no factual substance.

7. Guest
August 31, 2008, 09:44AM

Quotes As an addendum to my previous comments on Riccardos analysis of HTRE,I don't think he was aware that Microsoft Xbox has signed a multiyear,multistore sponsorship of all present and future Hip Hop Soda Shops.With Microsoft's presitige and clout I don't think they would align themselves Riccardo's"fizz" company.I surely trust Microsoft's judgement over Riccaedo's half baked a lazy analysis of HTRE's operations-just my opinion

8. Guest
August 30, 2008, 10:30AM

Quotes Judging by Riccardo's picture(avitar) with his out of date 50's look,and not visitng the soda shops,he is in no postion to critique this new groundbreaking thematic restaurant concept.Obviously,he is naive with respect to the competitive video gaming world with revenue in the billions.Riccardo is a sideline doubter whose opinion should be taken with a grain of salt,since his research is miniscule at best,Visit the stores,interview management,become a real analyst.HTRE recently hired new young experienced management that have great ideas,focus and have delieverd on their promises. .The pink sheets were just updated,which he is not even aware of.The combination of food,theme,merchandising.recording studio,.onsite and online competitive video gaming are all unique to the HIP HOP SODA SHOP.Socially,they have hired disadvaantaged youth and,will share gaming revenue with socially responsible activities.Riccardo,you could see this for yourself,if you would assume the role of a bonafide analyst and do a site visit.Just my opinion

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