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The building that housed the Hip Hop Soda Shop, among other businesses, was up for auction this week but the highest bid was rejected by the owner.
Tough times all around.
Related ProHipHop Coverage:
Hip Hop Soda Shop Slips Into Dead Pool
H3 Enterprises has announced the closing of their Tampa, Florida-based Hip Hop Soda Shop which is, in fact, their only physical location.
That leaves H3Gameline.com, which has no presence on Compete or Quantcast, suggesting a total absence of web traffic.
Considering H3 Enterprises' flatlined stock, this entity seems to have sunk to the bottom of a dirty pool at a cheap Tampa motel.
Official Site: Hip Hop Soda Shop
Related ProHipHop Coverage:
H3 Enterprises Stock [HTRE.PK] Under Ben Chavis
Looking Back: Dr. Ben and the HipHopSodaShop
Ben Chavis Out at H3 Enterprises [HipHopSodaShop]
Jordan Edelson New CTO at H3 Enterprises
H3 Enterprises Releases Sales Report w/Few Numbers
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
ProHipHop has been following the career of Ben Chavis at H3 Enterprises and the HipHopSodaShop from day one. Enjoy!
Dr. Benjamin F. Chavis New H3 Enterprises CEO
Dr. Benjamin Chavis Completes Takeover of H3 Enterprises
Dr. Ben Leads H3 to the Land of Pop N Go
Dr. Ben Chavis/HipHopSodaShop Fulfill Dr. King's Dream
HipHopSodaShop in Co-Branding Deal w/Diddy's Sean John
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 has announced the appointment of Jordan Edelson as Chief Technology Officer and Digital Entertainment Director to "spearhead H3's video gaming and web property development".
Hall of Fame Beverages announced that they are enlisting DJ JiJi Sweet to:
"produce a series of mixed music CDs of Hip Hop and R&B music featuring such artists as Eminem, Snoop Dogg, Ice Cube, Akon & Dr. Dre and others. The theme of our CDs will be 'The Hip Hop and R&B Hall of Fame of Music.'"
They are also sponsoring the mix show panel at the upcoming Urban Network Entertainment-Marketing Summit.
Hall of Fame Beverages was previously known as OG Nation and retains the OGNA stock symbol on the Pinksheets.
Official Sites:
Hall of Fame Beverages
DJ JiJi Sweet
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.
In a move that will attract a lot of attention, the HipHopSoda has announced a co-branding deal with Sean John, Diddy's fashion company.
I would love to know the terms of that deal cause, when you look at something like Diddy's Ciroc deal, you know that's got to cost HipHopSodaShop a big chunk of change in one form or another.
"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."
Status Ain't Hood has a great interview with Luther Campbell, aka Uncle Luke, about his history in the industry and how he views going public with the Luke Entertainment Group on the Pink Sheets as part of a process of building a major Southern label.
I want to focus on the topic of going public but the interview is worth checking for some hip hop history as well as Luke's take on emphasizing visual elements in marketing.
Luke wanted to go public but the long road to a Nasdaq IPO was not for him:
"I started doing a little bit of research on companies like Nestle and Volkswagen...Knowing that the traditional way is a long process, having more conversations with different people who are familiar with the stock business, I wanted to know if there's an easy pink-sheet way to go about it and build from there and hopefully end up on the senior boards."
Yet he still looks at the process as one of long-term building:
"Knowing that we're trading on the pink sheets right now, as we're growing this thing, it's beautiful. People tell me horror stories about pink sheets, and I say there are some horror stories because certain individuals went into pink sheet companies to use the system, to be unscrupulous. That's not me."
"I look at all these successful pink-sheet companies, and I say that's me right there. Grow from there to the next point. I'm excited about it. I'm happy. It's like starting all over again. I got to prove to everybody all over again that I'm creative enough in the things that I feel the public wants. We're going to fight to make the company successful."
I think he's got a great attitude and all power to him. While it's true that one of the downside of penny stocks is the lack of transparency allowing crooked operators to build on smoke-and-mirrors, any penny stock is vulnerable to market manipulation in the form of pump and dump schemes Asking Luke what they're planning to do when something like that breaks out would be a good thing.
What seems clear is that the entry of celebs like Luther Campbell is changing the hip hop penny stock scene:
"I always like to teach people and educate people. So even right now, by me going public and it getting the press that it's getting, it's brought more awareness of the stock market, that whole game, to the hip-hop audience. I get email, kids and adults saying "I'ma buy stock! Where do I buy it?" Or "This is historic, this is great, this is history." And you know they're not familiar with the business."
"We have a firm handpicked to deal with a whole different audience. You got to school them on how to purchase stock and where to purchase it from...If I have to stop or close up today, I feel like it's already did what it needed to do because I brought a whole different set of people, educated those different sets of people to the stock market."
From my own experiences of trading on the stock market, I know just how easy it is to convince yourself you know enough about the company and the state of the market to make smart choices when you're really making emotional choices.
If Luther Campbell's serious about building a great public company, one of the first signs will be transparency in their financial reports that exceed the standards of whatever level of disclosure is necessary to be on the Pink Sheets because the lack of publiclly available audited data is one of the biggest dangers with such stocks.
Previous ProHipHop Coverage:
Luther Campbell's Luke Entertainment Group Goes Public on Pink Sheets, Not Nasdaq
Over at Hip Hop Press:
Luke Entertainment Group Launches UncleLuke.tv
Luther Campbell Makes Appearances on Fox Business Network
RMD Entertaiment Group is a penny stock listed on the Pink Sheets as RMDM and referred to as RMDM.PK when discussed elsewhere. Currently it trades at less than a penny a share.
They've released a shareholder update in which they describe themselves as a "Music and Entertainment Company focused on the development and marketing of "Urban Media Content" worldwide" and give an overview of their activities which include:
Raising their classification on the Pink Sheets which doesn't look too good at the moment;
Releasing comedy ringtones beginning with Tony's Street Tones;
Leverage their "vast world-wide distribution center" to "attract significant music and video titles for download and ringtone sales" and increase their "current catalogue by 25 to 50 times";
Marketing their Roc Monee ringtones.
Once you peel away the typical self-promotion of any press release and take into account the additional fact that such press releases for penny stocks are as much about marketing the stock as the company, then RMD Entertainment Group isn't looking so hot.
They're in trouble on the Pink Sheets, which is on the easier end of the listing continuum, they don't have celeb talent and their "vast world-wide distribution center" is available to everyone since they're going digital-only and it's called the Internet.
Unless they've used their work with Roc Monee to establish streamlined access to a wide range of digital distributors, they don't sound like they've got much to their distinct advantage and may now be weighed down by their public status since that focuses so much energy on a stock price that seems to be in a total state of collapse [click on Charts tab].
For RMDM's sake, I hope Tony's Street Tones are pretty darned funny.
Though I try to stop myself from adding new categories at ProHipHop, really, I do, I've decided to add a Hip Hop Penny Stocks category because the over-the-counter, bulletin board, Pink Sheets stocks are getting ready to heat up as the celebrity factor enters the equation.
I've been covering such companies for a while, primarily in the Financial category and the Clubs/Restaurants category, but I think it's worth having them available in a separate section. I'll be moving old posts over or creating link lists to such posts soon and will be continually adding new ones about such companies and related businesses as the Luke Entertainment Group and the Hip Hop Soda Shop.
If you're really interested in this kind of thing you can keep a closer eye on developments as they're announced by following Hip Hop Press.
I recently received a press release stating that:
Luther Campbell today announced the creation of the Luke Entertainment Group (www.lukeentertainmentgroup.com), a multi-media company that will be operated on the NASDAQ pink sheets symbol (LKEN).
I declined to run it at Hip Hop Press because of the obvious inaccuracy. The NASDAQ exchange has nothing to with Pink Sheets or other Over The Counter means of trading so-called "penny stocks" that do not trade on the major exchanges.
Since I hadn't heard back from my follow-up note, I decided to see who picked this up as is and the first result was XXLmag.com, one of many reputable publications to make this easily made mistake, one that is also indicative of how inaccuracies in press releases from major pr agencies become news items in legitimate outlets.
The accurate symbol for Luke Entertainment, Inc. is LKEN.PK and it trades on the Pink Sheets.
Unfortunately there are many legitimate reasons to avoid these stocks due to the nature of the markets in which they trade in addition to the issue of properly analyzing companies that reveal little internal data.
No advice here except to educate yourself if you're involved with any stock market. And, if you do go public, make sure that your press releases are accurate about all statements related to your company's status. You don't want to take a backdoor route to an SEC violation!
Official Site:
Luke Entertainment Group
Rick Ross Turkey Give Away at Hip Hop Grub Spot
YouTube is acting up at the moment so I'm posting this video without seeing the whole thing, not something I'd normally do, but I have the feeling after the pics of Rick Ross greeting people that eventually he gives some turkeys away. Hopefully the beat changes by then.
This is one of a whole series of promotional videos from the Hip Hop Grub Spot about which I've previously posted.
They all are rather rough edged but do a nice job of providing an alternative to endless press releases about minor steps along the way. However there's plenty of time for the traditional penny stock pr approach if they do go public in such a manner. Wikipedia's entry on penny stocks, whose details may or may not be accurate, gives one a sense of the downside of such stocks.
Press releases for such companies often become a way to attempt to turn minor announcements into positive investor response. The Hip Hop Soda Shop's press releases [for H3Enterprises/HTRE] managed to mostly avoid that fate until Ben Chavis showed up and a brief period that included some fairly ephemeral news ensued most likely to spur investor interest. However they've general stuck to real announcements.
As Hip Hop Grub Spot moves forward it will be interesting to see how their marketing approach changes as they attempt to go public.
Note:
I had to close comments on my previous post due to folks attempting to boost one company over another in the traditional manner of attempting to influence investor opinion.. I'll probably have to do that with this post and, knowing that, I'm reminded of the fact that I would never take a company public in this manner because the penny stock sector is way too vulnerable to scams that can make the company look responsible for outside attempts to game the stock.
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