It’s a legend in the fight against New Jersey High School and a mystery in the stock market.
Paul Morina, principal of Paulsboro High School, New Jersey, is listed on the financial records as president, CEO, chief financial officer and much more of a Nevada-incorporated company whose shares are listed at levels that give him a valuation in excess of $ 100 million.
This is a strangely high valuation because the company, Hometown International, owns a charcuterie (and only a small charcuterie) in Paulsboro, where Morina’s trained high school wrestling team often wins state championships. The company has revealed that it has shareholders based in the Chinese territory of Macau.
According to Hometown International’s annual report, presented March 26 to the Securities and Exchange Commission, the store, Your Hometown Deli, has earned just $ 35,000 in (combined) sales over the past two years.
David Einhorn, hedge fund manager, mentioned Hometown International on Thursday in a letter to clients, warning of risks to retail investors.
“The pastrami must be amazing,” reported Einhorn of the company, whose shares rose from late March 2020 to early September to more than $ 9 per share, from $ 3.25 per share despite that the deli (its only operating business) was closed due to the coronavirus pandemic during this time period.
Hometown International’s annual report shows that Morina, who is also the company’s treasurer and director, holds 1.5 million common shares in the company, with guarantees of 30 million more shares. Morina owns 19% of Hometown’s outstanding 7.79 million common shares.
On Thursday, Hometown shares, which trade up to the over-the-counter market, had a closing price of $ 13.50 per share.
That makes Morina’s common stock worth $ 20.5 million, at least on paper.
The data in the dataset shows that the hometown rarely has more than a hundred shares that change hands a day and often have days when shares are not exchanged.
CNBC has asked for comments from Morina, whose biography in the SEC archives says he has won 25 state class championships as a coach, 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 presentation: “We believe that Mr. Morina’s deep knowledge and experience make him a valuable member of our board of directors.”
The presentation indicates that Hometown International, which was incorporated in 2014, 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, at the request of the SEC.
Lindenmuth, who did not immediately respond to requests for comment, also does not appear to have previous experience in food service.
But Hometown International said she believes her “deep knowledge and extensive experience” also make her a valuable business director.
Lindenmuth has no shares in the company, according to the SEC’s request.
The annual report says, “Currently, the company does not have full-time employees other than its executives and directors, Paul F. Morina, president and Christine T. Lindenmuth.” He adds: “Both currently work for the company without any compensation.”
Hometown’s annual report suggests the company was formed with the idea of creating a chain of stores with “a new concept of Delicatessen”.
“Through our wholly owned subsidiary, Your Hometown Deli Limited Liability Company, we operate a delicatessen store that includes“ home-made ”sandwiches and other entrees in a casual, friendly atmosphere,” he says. the documentation.
“The store is designed to provide local customers of all ages with a comfortable community meeting place. The company’s first unit was built in Paulsboro, New Jersey, aimed at smaller cities and communities.”
But that location, a small, cramped building, located just across the Delaware River from Philadelphia, remains the only store the company owns after about seven years of business.
According to the annual report, the president of the company is Peter Coker Jr., who is not listed on Hometown International.
Coker’s biography in the company’s annual report says the Lehigh University graduate in 1990 has been president of South Shore Holdings Limited, a Hong Kong-listed company, since 2013.
He also says Coker was 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 was President of Global Offshore Trading Pte (Singapore),” the presentation says. “From 2002 to 2005, Mr. Coker served as President of Wellington Securities (New Zealand). Mr. Coker was an officer in the Bridge Companies before joining Wellington Securities (New Zealand) in 2002. “.
North Carolina resident Coker’s father, Mr. Peter Coker, is listed in the SEC statement as the owner of 63,334 common shares in Hometown International, with guarantees of an additional 1.26 million shares.
CNBC has contacted both Cokers to comment.
Other homeowner stock owners are 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 Macau, China.
One of Macau’s companies, VCH Limited, in May 2020 signed a consulting agreement with Hometown International, according to the statement.
“Under this agreement, VCH hired as the company’s consultant to, among other things, create and build a presence with a high net worth and institutional investors,” Hometown said in its annual report.
“The term of the agreement is one year; always, though, that each party has the right to terminate the agreement with 30 days ’prior written notice to the other,” the report said.
“Under the agreement, VCH will receive $ 25,000 a month during the term of the agreement, in addition to reimbursement of expenses previously approved by the company.”
Hometown International recorded a loss of $ 624,438 for 2020 and a loss of $ 153,930 for 2019, according to the firm’s annual report.
Much of the company’s cost increases in 2020 came from $ 320,000 in what it called “consulting fees”.
The largest Coker has been identified in other documents filed with the SEC, as well as the founder and CEO of Tryon Capital Ventures, a North Carolina entity that has a consulting deal with Hometown that pays Tryon $ 15,000 a month.
“We plan to extend the term of the consulting deal with Tryon for an additional period of one year,” the annual report says.