This might just be one of the strangest stories coming out of Wall Street. A company that owns a single deli in New Jersey soared to a more than $100 million value on the stock market on Feb. 7.
Hometown International, which has traded on the over-the-counter market since 2019, owns Your Hometown Deli, a “home-style” eatery in Paulsboro, New Jersey.
Hometown International “catapulted out of obscurity last week after hedge fund manager David Einhorn mentioned its bizarrely high market capitalization in a letter to clients,” CNBC reported.
“Someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey … HWIN reached a market cap of $113 million on February 8,” Einhorn wrote. “The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also happens to be the wrestling coach of the high school next door to the deli. The pastrami must be amazing.”
Although Hometown’s stock rarely sees a trading volume of more than 1,000 shares, on April 7, nearly 43,000 shares changed hands.
Paul Morina, the current principal and wrestling coach of the nearby Paulsboro High School, is listed in financial records as president of deli owner Hometown International.
Hometown earned less than $36,000 over the last two years, including just about $14,000 in 2020 because it was closed during the covid-19 pandemic, according to the company’s latest annual report.
The stock closed on April 7 at $13.50, making Morina’s stake of 1.5 million common shares worth more than $20 million. He also owns warrants for another 30 million shares, records show, The New York Post reported.
The shares lost as much as a third of their value on April 8 as they fell as low as $9.01. The company ended with a market cap of about $70 million.
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Adding to the bizarre story behind Hometown International is that a key investor has a history of legal troubles and is associated with several people who have criminal convictions or have been sanctioned by regulators.
Shareholder Peter Coker Sr. is a 78-year-old North Carolina businessman. His Hong Kong-based son, Peter Coker Jr., is chairman of Hometown International.
Coker Sr. holds 63,334 shares of Hometown Common stock, with warrants for another 1.26 million shares. Coker Sr.’s company, Tryon Capital, received a $15,000 monthly payment through a consulting contract with Hometown, CNBC reported.