He is a legend of 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 financial records as president, CEO, CFO and more at a Nevada-incorporated company whose stock trades at levels that give it a valuation greater than $ 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 Morina-coached high school wrestling team regularly wins state championships. The company has disclosed that it has shareholders in the Chinese Macau area.
According to Hometown International’s annual report, filed with the Securities and Exchange Commission on March 26, the store, Your Hometown Deli, has made just $35,000 in sales in the past two years.
Hedge fund manager David Einhorn named Hometown International in a letter to customers Thursday warned of the risks for retail investors.
“The pastrami must be amazing,” Einhorn broke out about the company, whose shares rose to more than $9 a share from $3.25 a share from late March 2020 to early September, despite the deli—the sole operating activity – was closed due to the coronavirus pandemic during that time frame.
Hometown International’s annual report shows that Morina, who is also the company’s treasurer and president, has 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 trades thinly in the over-the-counter market, closed at $13.50 a share.
That makes Morina’s common stock holdings worth $20.5 million alone—on paper, at least.
FactSet data shows that Hometown rarely changes hands more than a few hundred stocks per day, and often has days when no stocks are traded.
CNBC has reached out to Morina, whose SEC filing biography says he has won 25 class state championships as a coach, with more than 550 victories.
That biography doesn’t say that Morina had previous experience in the foodservice industry.
Nevertheless, Hometown International said in its filing, “We believe that Mr. Morina’s in-depth knowledge and extensive experience make 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 vice president and secretary of residence 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 with food service.
But Hometown International said it believes her “deep knowledge and extensive experience” also make her an esteemed corporate director.
Lindenmuth does not own any shares in the company, according to the SEC filing.
The annual report states, “The company currently has no full-time employees except for its officers and directors, Paul F. Morina, president, and Christine T. Lindenmuth.” It adds, “Both of them are currently working for the company without any compensation.”
Hometown’s annual report suggests that the company was founded with the idea of creating a retail chain with “a new deli concept.”
“Through our wholly owned subsidiary, Your Hometown Deli Limited Liability Company (“Your Hometown Deli”), we operate a deli offering ‘homemade’ sandwiches and other entrees in a casual and friendly atmosphere,” the filing said.
“The store is designed to provide comfortable meeting places for local customers of all ages. The company’s first unit, targeting smaller towns and communities, was built in Paulsboro, New Jersey.”
But that location, a low-slung, rectangular building across the Delaware River from Philadelphia, remains the only store the company owns after about seven years in operation.
According to the annual report, the company’s chairman is Peter Coker Jr., who does not own any shares in Hometown International.
Coker’s bio in the company’s annual report says the 1990 graduate of Lehigh University has been chairman of South Shore Holdings Limited, a Hong Kong-listed company, since 2013.
It also states that Coker was the managing partner of Pacific Advisers and was also 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 filing 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 as the owner of 63,334 common stock in Hometown International, with warrants for 1.26 million additional shares.
CNBC has reached out for comment from both Cokers.
Other Hometown stock owners include Blackwell Partners LLC, Series A, with a Hong Kong address; and two other Hong Kong entities, Star V Partners LLC and Maso Capital Investments Limited.
Four other companies or entities listed as 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 engaged as an advisor to the company, including to create and grow a presence with high net worth and institutional investors,” said Hometown in its annual report.
“The term of the agreement is one year; provided, howeverthat either 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 per month during the term of the agreement, in addition to the expense allowance 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 cost increases in 2020 came from $320,000 in what it called “consulting fees.”
The elder Coker has been identified in other SEC filings, as well as 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 duration of the Consulting Agreement with Tryon for another year,” the annual report said.