He’s a legend of New Jersey high school wrestling – and a mystery in the stock market.
Paul Morina, the director of Paulsboro, New Jersey, High School, is listed in the financial records as the president, CEO, CFO, and more at a Nevada-based company whose stock trades at levels that give it a valuation in excess of $ 100 million.
That’s an oddly high rating because the company, Hometown International, has a deli – and only one small deli – in Paulsboro, where the high school wrestling team coached by Morina regularly wins state championships. The company has disclosed that it has shareholders based in Macau’s Chinese territory.
According to Hometown International’s annual report, filed with the Securities and Exchange Commission on March 26, the store, the Hometown Deli, has had just $ 35,000 in sales in the past two years.
Hedge fund manager David Einhorn mentioned Hometown International in a letter to clients on Thursday, warning of the risks to retail investors.
“The pastrami has got to be great,” Einhorn told the company, whose stock rose from $ 3.25 a share to over $ 9 a share from late March 2020 to early September, despite the deli – its only operating activity – was closed due to the coronavirus pandemic. during that time frame.
Hometown International’s annual report reveals that Morina, who is also the treasurer and president of the company, owns 1.5 million common shares in the company, with warrants for 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 in the over-the-counter market, had a closing price of $ 13.50 a share.
That makes Morina’s common stock alone worth $ 20.5 million – at least on paper.
FactSet data shows that Hometown rarely changes hands more than a few hundred shares per day, and often has days when no shares are exchanged.
CNBC has reached out to Morina, whose biography in the SEC filing says he has won 25 class state championships as a coach, with more than 550 wins.
That biography does not say that Morina had previous experience in the hospitality industry.
Nonetheless, Hometown International said in its submission, “We believe Mr. Morina’s deep knowledge and extensive experience makes him a valuable member of our board of directors.”
According to the filing, Hometown International, founded in 2014, has entered into a lease with Mantua Creek Group, of which Morina is a member, for its retail space.
The hometown vice president and secretary is Christine Lindenmuth – a 46-year-old math teacher at Paulsboro High School, according to the SEC filing.
Lindenmuth, who did not immediately respond to requests for comment, also appears to have no previous experience in food service.
But Hometown International said it believes her “deep knowledge and extensive experience” also makes her a valued corporate director.
According to the SEC filing, Lindenmuth does not hold any stock in the company.
The annual report states, “The company currently has no full-time employees, other than the officers and directors, Paul F. Morina, president, and Christine T. Lindenmuth.” It adds, “Both are currently working without any compensation for the company.”
Hometown’s annual report suggests that the company was founded with the idea of creating a retail chain 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’ house style ‘sandwiches and other entrees in an informal and friendly atmosphere,’ the application said.
“The store is designed to provide local customers of all ages with comfortable community meeting places. Aimed at smaller towns and communities, the company’s first unit was built in Paulsboro, New Jersey.”
But that location, a low-slung, boxy building across the Delaware River from Philadelphia, remains the only store the company owns after about seven years in business.
According to the annual report, the chairman of the company is Peter Coker Jr., who is not listed as the holder of no Hometown International stock.
According to Coker’s biography in the company’s annual report, the 1990 graduate of Lehigh University has served as chairman of South Shore Holdings Limited, a Hong Kong-listed company, since 2013.
It also says that Coker was the managing partner of Pacific Advisers, as well as being a partner in a Shenzhen, China-based private equity firm called TDR Capital Investment Ltd. from 2009 to 2013.
“From 2006 to 2009, Mr. Coker was Chairman of Global Trading Offshore Pte (Singapore),” the application said. “From 2002 to 2005, Mr. Coker was the Chairman of Wellington Securities, New Zealand. Mr. Coker was an officer of the Bridge Companies before joining Wellington Securities, New Zealand in 2002.”
Coker’s father, North Carolina resident Peter Coker Sr., is listed on the SEC filing and owns 63.34 common stock in Hometown International, with warrants for an additional 1.26 million shares.
CNBC has been contacted for comment from both Cokers.
Other owners of Hometown stock 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 the shareholders of Hometown International are located in Macau, China.
One of the Macau companies, VCH Limited, entered into an advisory agreement with Hometown International in May 2020, the filing said.
“Under this agreement, VCH was appointed as an advisor to the company, among other things to create and build a presence with high net worth and institutional investors,” Hometown said in its annual report.
“The term of the agreement is one year; provided however, that each 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 term of the agreement in addition to reimbursement of expenses pre-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.
Many of the company’s 2020 cost increases came from $ 320,000 to what it called “consulting fees.”
The elder Coker has been identified in other SEC filings, as is the founder and director of Tryon Capital Ventures, a North Carolina entity that has an advisory agreement with Hometown that pays Tryon $ 15,000 a month.
“We expect to extend the term of the consulting agreement with Tryon by one year,” the annual report said.