An intelligently critical report on the currently dim outlook for H3 Enterprises and the HipHopSodaShop reminded me that I meant to share the stock chart covering the period for which Ben Chavis helmed H3.

Rev. Ben took the reigns in June of 2007 and left in defeat in July of 2008, just a bit over a year.

I’d love to embed a stock chart but financial websites have dropped the ball and the sites that do provide embeddable charts exclude charts for penny stocks like HTRE.PK.

So here’s a link to a 2 year stock chart for H3 Enterprises Inc. at Yahoo Finance.

As you can see, Ben Chavis’ new role as CEO boosts the stock in June ’07 after a considerable drop.  Much of that added value disappears by October ’07 and is then revived by an appearance on the Fox Business Network in December ’07 from which it mostly declined till they kicked him out.

You can get more detailed and compare the history of press releases to the chart and see what helped move the price and what didn’t.  Note, too, the lack of any mainstream coverage of this stock.  It’s all press releases.

Today the stock continues to fluctuate and, as I write, has dropped to less than .04 cents.

One shouldn’t blame all this on Ben Chavis but, if one looks at what H3 Enterprises was doing pre-Ben and post-Ben, you have to wonder what he added other than temporary bouts of media appeal though, to be fair, somebody made a little money off all that stock price movement.

Related ProHipHop Coverage:
Looking Back: Dr. Ben and the HipHopSodaShop

Today H3 Enterprises, best known for the HipHopSodaShop concept, announced the replacement of the management team including former President and CEO Ben Chavis.

Given that Dr. Ben was preceded by Jackie Robinson, that’s two icons down!

Reason given for the change:

"to focus on building strong internal controls to help manage the Company’s expansion efforts"

The announcement describes the new team as a:

"dynamic new management team, totally focused on implementing every element of the Company’s award winning business model as expeditiously and profitably as possible."

In addition:

"H3 believes this new management team brings clarity and creates a unified sense of purpose for the Company. The vision of H3′s award winning business model is now a step closer to realization with all the key players acting in unison toward a common purpose."

The new management team at H3 Enterprises:

Mr. Guy M. Jean-Pierre – Chief Legal Officer
Mr. Dennis Ruggeri- Chief Financial Officer
Mr. Jordan Edelson – Chief Technology Officer
Brian Peters [H3 Co-Founder and Director] – Interim President & CEO

H3 Enterprises’ headquarters moves to Boca Raton, Florida:

"The Board believes it is beneficial to have the Company’s headquarters in the same state as the Company’s principal businesses, including the Hip Hop Soda Shop(s) located in Miami Gardens and Tampa Bay. South Florida is also home to most of H3′s top officials."

Keyword analysis suggests lack of focus and unity under Ben Chavis:

Note the repeated presence of terms such as "focus", "focused", "expeditiously", "clarity", "unified sense of purpose", "acting in unison".

You mean, Dr. Ben’s "personal laser-like focus" wasn’t getting the job done?

But what about all those celebrity connects?  Wasn’t that the right marketing approach?

And what about fulfilling Dr. King’s dream?

A lot of hubris has just left the building!  Time to get back to work.

Before we give H3 Enterprises the big thumbs up for this move, let’s see who they bring in to replace Ben Chavis since they now have a rather questionable history of celebrity hires.  But the focus on tightening financial aspects is quite sound if this company hopes to ever move beyond the status of a penny stock with a portfolio of deals and a local restaurant chain.

Hey, I hear Scott Storch may be available!

Related ProHipHop Coverage:
Looking Back: Dr. Ben and the HipHopSodaShop

H3 Enterprises, the company that created the HipHopSodaShop, has announced its "first full monthly revenue report for 2008."

Basically they give a description of what’s happening without real financial figures except for the claim attributed to CEO Benjamin Chavis:

"Despite the fact that we have yet to touch our marketing budget for Tampa since all 48,000 University of South Florida students were on winter break during our first month of operation, we still managed to take in over $125,000 with accelerating sales growth rates."

I spoke briefly with H3 Enterprises’ Tanya Munro who’s in charge of Investor Relations and she says they are generally sharing all the public information they’re making available in these press releases though she’s going to double-check with Dr. Chavis regarding this revenue report.

Though I see no reason to cast doubt on the revenue figure, I do feel this press release/report is a good example of why investing in OTC and BB stocks can be perilous due to the lack of full financial reports.

The USF winter break ran from around December 15th to January 6th so that would affect sales if a large part of their base is USF students though one might also expect a response from local folks in holiday mode checking out the new store including students from other schools that are in Tampa to be with their families.

Since this report covers January revenue figures, that means they lost a week at most, though students usually get back at least a couple of days before school starts.  It also raises the question of why they haven’t spent money on marketing since that returning crowd would be ripe for new adventures at the start of the school year and should have been receptive to a focused, campus-based marketing campaign if they are, in fact, going to be receptive.

More complete financial information would help clear up this confusion and make this press release/report appear to be more than a marketing tool for the stock itself.

Update:
Ms. Munro got back to me with the official word that, for the moment, all publicly available financial information is included in the press releases.  However they do intend to be more forthcoming in the near future and I think that’s a really good thing for both H3 Enterprises and for investors.

One of my biggest concerns regarding so-called penny stocks is not that the companies are necessarily being shady by not disclosing information because they’re not legally required to disclose as much as companies that operate via more stringent exchanges.  But lack of disclosure means that companies on BB and OTC exchanges can be more easily gamed by criminal elements with absolutely no connection to those in the company.

So exceeding their disclosure requirements will ultimately strengthen a company like H3 Enterprises even though that means folks like me will have even more to work with in our critiques.  While one of the strengths of being private is the ability to manage one’s public image more thoroughly, long term that’s just not a viable strategy for any public company that wants to build a solid, lasting enterprise.  So if H3 can follow through, they’ll be taking an important but not always pleasant step towards realizing their grand vision.

Dr. Benjamin Chavis, CEO and President of H3 Enterprises, Will Appear Live on Fox Business Network’s "Money for Breakfast" On Monday, Jan. 21st, the Morning of Dr. Martin Luther King’s National Holiday:

"Chavis stated today, ‘Our HipHopSodaShop franchise is a fulfillment of Dr. King’s dream of economic empowerment, equality, and having the opportunity and responsibility to overcome poverty. Sustainable economic development is the key in the 21st Century to realizing Dr. King’s dream. We must learn from the past and be courageous enough to change the present to insure the future for generations of young people who are crying out for a better quality of life. H3Enterprises, Inc is a publicly traded company that has an effective business plan with a serious social conscience."