He’s a high school wrestling legend in New Jersey – and a mystery in the stock market.
Paul Morina, principal of Paulsboro, New Jersey, is listed in the financial records as president, CEO, chief financial officer and more at a Nevada company whose shares trade at levels that give it a valuation of over $ 100 million.
This is a strangely high rating, as the company, Hometown International, owns a delicatessen – and only a small delicatessen – in Paulsboro, where Morina’s high school wrestling team frequently wins state championships. The company revealed that it has shareholders based in Macau, China.
The store, Hometown Deli, has made just $ 35,000 in sales – combined – in the past two years, according to Hometown International’s March 26 annual report to the Securities and Exchange Commission.
Hedge fund manager David Einhorn mentioned Hometown International on Thursday in a letter to clients on Thursday, warning of risks to retail investors.
“The pastrami must be amazing,” Einhorn said of the company, whose shares from late March 2020 to early September rose to more than $ 9 a share from $ 3.25 a share, despite the fact that deli – its only operational activity – was closed due to the coronavirus pandemic. during that time.
Hometown International’s annual report shows that Morina, who is also the company’s treasurer and director, owns 1.5 million common shares in the company, with mandates for another 30 million shares. Morina owns 19% of the remaining 7.79 million ordinary shares in her hometown.
On Thursday, Hometown shares, which are trading thin on the over-the-counter market, had a closing price of $ 13.50 per share.
This makes Morina’s regular shares worth $ 20.5 million – at least on paper.
The data in the dataset show that the hometown rarely has more than a few hundred shares that change hands a day and often have days when no shares change.
CNBC contacted Morina, whose biography in the SEC file says he won 25 state class coaching championships, with more than 550 victories.
This biography does not say that Morina had previous experience in the food service industry.
However, Hometown International said in its file: “We believe that Mr Morina’s in-depth knowledge and extensive experience make him a valuable member of our board.”
The file states that Hometown International, which was established in 2014, has a lease with Mantua Creek Group, of which Morina is a member, for its storage space.
Her hometown vice president and secretary is Christine Lindenmuth – a 46-year-old math teacher at Paulsboro High School, according to the SEC.
Lindenmuth, who did not immediately respond to requests for comment, does not appear to have any previous experience in food services.
But Hometown International said it believes its “in-depth knowledge and extensive experience” also make it an acclaimed company director.
Lindenmuth does not own shares in the company, according to the SEC registration.
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.” He adds: “Both currently work for the company without any compensation.”
The hometown’s annual report suggests that the company was formed 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, we operate a delicatessen that offers ‘home-style’ sandwiches and other entrees in an informal and friendly atmosphere,” the file reads. .
“The store is designed to provide local customers of all ages with a comfortable community gathering place. Aimed at smaller cities and communities, the company’s first unit was built in Paulsboro, New Jersey.”
But that location, a dilapidated, boxed building just across the Delaware River in Philadelphia, remains the only store the company owns after about seven years of business.
The president of the company, according to the annual report, is Peter Coker Jr., who is listed as holding shares in Hometown International.
Coker’s biography in the company’s annual report says the 1990 Lehigh University graduate has been president 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 and was also a partner in a private equity firm in Shenzhen, China, called TDR Capital Investment Ltd. from 2009 to 2013.
“From 2006 to 2009, Mr Coker served as chairman of Global Offshore Trading Pte (Singapore),” the file said. “From 2002 to 2005, Mr. Coker served as President of Wellington Securities, New Zealand. Mr. Coker served as an officer for Bridge Companies before joining Wellington Securities, New Zealand in 2002.”
Coker’s father, a resident of North Carolina, Peter Coker Sr., is listed on the SEC’s registry as holding 63,334 common shares in Hometown International, with warrants for an additional 1.26 million shares.
CNBC contacted both Cokers for comments.
Other Hometown shareholders include Blackwell Partners LLC, Series A, which has an address in Hong Kong; and two other Hong Kong entities, Star V Partners LLC and Maso Capital Investments Limited.
Four other companies or entities listed as owners of Hometown International shares are headquartered in Macao, China.
One of the Macao companies, VCH Limited, concluded a consulting agreement with Hometown International in May 2020, the file states.
“Under this agreement, VCH has been hired as a consultant to the Company to create, among other things, a high net worth presence and institutional investors,” Hometown said in its annual report.
“The duration of the agreement is one year; provided, however, that each party has the right to terminate the agreement with 30 days’ written notice to the other, “the report said.
“Under the agreement, VCH will receive $ 25,000 per month for the duration of the contract, in addition to reimbursement of expenses previously approved by the company.”
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 rising costs in 2020 came from $ 320,000 in what it called “consulting fees.”
The elderly coker has been identified in other SEC filings, as has the founder and director of Tryon Capital Ventures, a North Carolina entity that has a consulting agreement with Hometown that pays Tryon $ 15,000 a month.
“We anticipate extending the term of the consultancy agreement with Tryon for an additional one year,” the annual report said.