Something a‘rye’: Is tiny deli worth $100M?

A company that owns a single deli in south New Jersey became worth more than $100 million on the stock market in recent months — marking the latest oddity of the “meme stock” era.

Hometown International Inc. amassed the meaty valuation even though its sole business engine is Your Hometown Deli, a “home-style” eatery in Paulsboro, NJ, just across the Delaware River from Philadelphia International Airport.

Its president and CEO is Paulsboro local Paul Morina, a former member of the town council and current principal of nearby Paulsboro HS, where he also coached the wrestling team to 25 class state championships, according to his company biography.

The humble delicatessen raked in less than $36,000 in revenue over the last two years, including just about $14,000 in 2020 because it was closed during the COVID-19 pandemic, the company’s latest annual report shows.

But that hasn’t stopped Hometown International’s share price from climbing as high as $14.50 on Feb. 8 — giving it a market capitalization of about $113 million. The stock trades on an over-the-counter market where just a few hundred shares change hands on a typical day.

The stock closed Thursday at $13.50, making Morina’s stake of 1.5 million common shares worth more than $20 million. He also owns warrants for another 30 million shares, records show.

The shares lost as much as a third of their value on Friday as they fell as low as $9.01, giving the company a market cap of about $70 million.

Hometown International caught the eye of hedge-fund honcho David Einhorn, who mentioned the company in a Thursday client letter as an example of bizarre and risky marketactivity that threatens small investors.

“The pastrami must be amazing,” Einhorn wrote of the deli. “From a traditional perspective, the market is fractured and possibly in the process of breaking completely.”

Hometown International was incorporated in Nevada in May 2014, about four months after the deli itself was incorporated in New Jersey and roughly a year and five months before it actually opened in October 2015, the annual report says.

Morina did not return an e-mail message or phone call on Friday.