He’s a legend in New Jersey high school wrestling – and a mystery in the stock market.
Paul Morina, the principal of Paulsboro, New Jersey, High School is listed in the financial records as the president, CEO, CFO, and more of a Nevada-incorporated company whose shares trade at levels that have a valuation of more than 100 million US dollar results.
That’s an oddly high rating given that Hometown International owns one deli – and only one small deli – in Paulsboro, where the Morina-trained high school wrestling team often wins state championships. The company announced that it has shareholders based in China’s Macau Territory.
According to Hometown International’s annual report filed with the Securities and Exchange Commission on March 26, the store, Hometown Deli, had combined sales of just $ 35,000 over the past two years.
Hedge fund manager David Einhorn mentioned Hometown International in a letter to clients Thursday warning of the risks to retail investors.
“The pastrami has to be amazing,” Einhorn told the company, whose shares rose from $ 3.25 per share to over $ 9 per share from late March 2020 to early September, despite the delicatessen business – the only operating business – due to the coronavirus -Pandemic was closed during this time frame.
Hometown International’s annual report shows that Morina, who is also the company’s treasurer and director, owns 1.5 million common shares of the company and guarantees an additional 30 million shares. Morina owns 19% of Hometown’s outstanding 7.79 million common stock.
On Thursday, Hometown’s stock, which is barely traded on the over-the-counter market, closed at $ 13.50 per share.
That alone is Morina’s common stock worth $ 20.5 million – at least on paper.
FactSet data shows that in Hometown, rarely more than a few hundred stocks change hands per day, and often days when no stocks are exchanged.
CNBC has approached Morina for comment, whose biography on SEC files states that as a coach he has won 25 class state championships with more than 550 wins.
This biography does not imply that Morina had any previous experience in the food service industry.
Nonetheless, Hometown International said in its filing: “We believe that Mr. Morina is a valuable member of our Board of Directors because of his extensive knowledge and experience.”
Filing states that Hometown International, which was founded in 2014, has signed a lease agreement with Mantua Creek Group, which Morina is part of, for their retail space.
The hometown vice president and secretary is Christine Lindenmuth – a 46-year-old math teacher at Paulsboro High School.
Lindenmuth, who did not immediately respond to requests for comments, also appears to have no experience in food service.
However, Hometown International believes that her “in-depth knowledge and experience” also makes her a valued business leader.
According to the SEC filing, Lindenmuth does not hold any shares in the company.
The annual report states: “The company currently has no full-time employees other than its officers and directors, Paul F. Morina, President, and Christine T. Lindenmuth.” It adds, “Both are currently working for the company without compensation.”
Hometown’s annual report suggests that the company was founded with the idea of creating a chain of stores with “a new delicatessen concept”.
“Through our wholly-owned subsidiary, Your Hometown Deli Limited Liability Company (‘Your Hometown Deli’), we operate a deli that offers sandwiches and other ‘home-style’ entrees in a casual and friendly atmosphere,” the file says .
“The store is designed to provide a convenient hangout for local customers of all ages. The company’s first unit was built in Paulsboro, New Jersey and is aimed at smaller towns and cities.”
But that location, a low, box-shaped building just across the Delaware River from Philadelphia, is still the only business the company owns after about seven years of operation.
The company’s chairman, according to its annual report, is Peter Coker Jr., who does not own any shares in Hometown International.
According to Coker’s biography in the company’s annual report, the 1990 Lehigh University graduate has been chairman of South Shore Holdings Limited, a Hong Kong-listed company, since 2013.
Coker is also said to have been the managing partner of Pacific Advisers from 2009 to 2013 and a partner in a Shenzhen, China-based private equity firm called TDR Capital Investment Ltd. was.
“From 2006 to 2009, Mr. Coker was Chairman of Global Trading Offshore Pte (Singapore),” the file reads. “From 2002 to 2005, Mr. Coker was Chairman of Wellington Securities, New Zealand. Mr. Coker was an officer of the Bridge Companies prior to joining Wellington Securities, New Zealand in 2002.”
Coker’s father, North Carolina-based Peter Coker Sr., is listed on the SEC as the holder of 63.34 common shares in Hometown International, with warrants for an additional 1.26 million shares.
CNBC has asked both cokers to comment.
Other Hometown stock owners include Blackwell Partners LLC, Series A, with an address in Hong Kong; and two other companies in Hong Kong, Star V Partners LLC and Maso Capital Investments Limited.
Four other companies or organizations listed as shareholders in Hometown International are based in Macau, China.
One of the companies in Macau, VCH Limited, entered into a consultancy agreement with Hometown International in May 2020.
“As part of this agreement, VCH was hired as an advisor to the company, including building and building a presence with wealthy and institutional investors,” Hometown said in its annual report.
“The term of the agreement is one year. Provided that either party has the right to terminate the agreement after 30 days’ prior written notice to the other party,” the report said.
“Under the agreement, VCH will receive $ 25,000 per month for the life of the agreement, in addition to reimbursement of company pre-approved expenses.”
Hometown International posted a loss of $ 624,438 for 2020 and a loss of $ 153,930 for 2019, according to the company’s annual report.
Much of the company’s 2020 cost increases came from $ 320,000 in so-called “consultancy fees.”
The elder Coker has been identified in other SEC filings, as has the founder and CEO of Tryon Capital Ventures, a North Carolina company that has an advisory agreement with Hometown that pays Tryon $ 15,000 per month.
“We are assuming that the term of the consulting contract with Tryon will be extended by another year,” says the annual report.