The $100 Million New Jersey-Based Hometown Deli Has Fired Its Wrestling Coach CEO
Last month, we highlighted when fund manager David Einhorn pointed out a New Jersey deli that was trading with an insane market cap of over $100 million as one of the hallmarks of the bubble the market is in. Einhorn wrote:
“Strange things happen to all kinds of stocks. Last year, on one day in June, the stocks of about a dozen bankrupt companies roughly doubled on enormous volume. Recently, the Wall Street Journal reported a boom in penny stocks.
Someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey. The deli had $21,772 in sales in 2019 and only $13,976 in 2020, as it was closed due to COVID from March to September. HWIN reached a market cap of $113 million on February 8. 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. Small investors who get sucked into these situations are likely to be harmed eventually, yet the regulators – who are supposed to be protecting investors – appear to be neither present nor curious.”
The deli was subsequently covered in the news – as was its mysterious CEO Paul Morina, who doubled as both a wrestling coach and school principal (as you do when you’re a $100 million company CEO).
And now, it looks as though – for one reason or another (perhaps due to the spotlight) – the company has decided to move forward from the “talents” of Morina, who has been fired as CEO, according to CNBC.
The company’s majority shareholders voted to remove him and “the company’s only other executive, vice president and secretary Christine Lindenmuth, who works with Morina as an administrator at nearby Paulsboro High School,” CNBC wrote.
Recall, back in late April, we noted that the deli was linked to another shell company whose stock recently exploded, E-Waste. That company, which has multiple connections to Hometown, announced its President had resigned last week.
E-Waste is a self-admitted shell company and had total assets of about $183,000 and liabilities of $412,400 as of its most recent SEC filings. It posted a net loss of $58,000 for the 9 months ended November 30. The company’s own filings state it was created in 2012 “to develop an e-waste recycling business” but “was not successful in its efforts and discontinued that line of business.”
It has been a shell company since then and has been looking to “engage in a business combination with a private entity whose business presents an opportunity for its shareholders.”
But E-Waste’s stock, like Hometown’s, had recently rocketed to a high of $10.25 per share. It put the company’s market cap at over $100 million.
Not unlike Hometown Deli, E-Waste also had little ongoing business. Yet this didn’t stop Hometown Deli from lending E-Waste $150,000 late last year – even while the deli was closed due to the pandemic. E-Waste CEO John Rollo also had an interesting former gig for someone in the waste business: he worked another job as a patient transporter at a northern New Jersey hospital, at a healthcare system CNBC says he’s still employed at.
Sun, 05/16/2021 – 19:30