First a quick recap: 50 Cent, also known as Curtis Jackson, recently took heat for touting shares in a penny stock company called H & H Imports (HNHI.OB) on Twitter without mentioning that he owned a 12.9% stake in the company. Within hours, enough of his 3.8 million followers bought the stock to send the share price soaring some 270%.
50 Cent took the offending tweets down apparently after discovering that his Twitter touts on behalf of HNHI could violate SEC rules, and has since become far more cautious about what he tweets:
- "HNHI is the right investment for me it may or may not be right for u. Do your homework."
- "I own HNHI stock thoughts on it are my opinion. Talk to financial advisor about it."
So what about this company sold 50 Cent?
HNHI is the parent company of Infomercial maker TV Goods, Kevin Harrington, the company's chairman, told me in a telephone interview. The company went public by engaging in a "reverse merger" with an already public company called H & H Imports.
While Harrington says he's sold "billions" of dollars worth of goods via Infomercial, he admits that he's never run a public company before and this one is a start-up that has yet to sell much of anything. In a previous post, I mentioned that H&H sold less than a half-million worth of goods during the first nine months of 2010 and lost money -- a lot of money -- on those sales and other administrative costs.
What does HNHI sell? Harrington says the company is in the process of bringing dozens of new products to market, including 50 Cent's wireless headphones, called "Sleek." But Sleek by 50 Cent won't be available for sale until summer. What does TVGoods sell now?
Slippers with night lights, according to Harrington. (The Infomercial calls these "high-tech house shoes.")
HNHI peddles something dubbed "BrightFeet," which are standard slippers with a twist. When you put your feet in and step down, a tiny flashlight in the front of the slipper clicks on. Want a midnight snack? Ordinarily "that could be dangerous," the Infomercial warns (because you could step on something or stub your toe). But BrightFeet can light your way to the refrigerator like the headlight on your Harley. There are five designer colors, including camouflage for those who don't want their lighted slippers to look wimpy.
What else do they sell? A caffeine food additive called FEIN. Harrington couldn't name any other products that were currently available for sale through TV Goods.
"We have more than 10 projects that we have announced that we are in some form of bringing to the market," Harrington says. "The gestation period on projects is anywhere from 4 or 5 months to several years."
If TV Goods web site can be used as a guide, here's what investors in Fiddy's company can expect to see peddled to the company's television viewers in the future:
Nubrella(tm) : Bad weather? No need to worry about your umbrella collapsing in the wind. Pop on a Nubrella -- essentially a big plastic bubble over your head -- and your hair is perfect and your hands are free. The video for this product didn't show how the product manages to avoid the obvious potential pitfall of steaming up the plastic bubble too much to see where you're going. But the shots of the mom of three using the Nubrella, while her kids walk to car unprotected is a must-see.
T-Caps: It's a combination baseball cap/sunglasses.
PumMagic: A cleaning solution that, like pitchman Hulk Hogan, only seems abrasive.
Hydroheel Sock System: Advertised as a "pedicure on the go" for people willing to wander around wearing a plastic sock.
The rest of the products are listed here, but note that while the site calls these TV Goods "current products," Harrington said they were mostly not yet available -- at least not through TV Goods, a.k.a. 50 Cent's HNHI. If you want to watch the Infomercial videos, you can access them all here.
Considering whether you should buy HNHI stock like 50 Cent? Check out our previous post 50 Cent Penny Stock "Pump & Dump?" for a look at the company's financial statements and legal warnings to investors.
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