“Whatever it is, it’s not very good”: The strange, incredible case of the $100 million deli
By Michael Linhorst, Fast Company, April 27, 2021
Partway down a residential street in Paulsboro, New Jersey, a working-class town best known for its high school wrestling team, is a seemingly unremarkable deli.
Out front, a green, white, and red sign advertises “Italian Specialties.” Inside, according to the menu, you can get a $6 burger or a grilled ham and cheese for $5.25.
But Your Hometown Deli isn’t like other South Jersey hoagie joints.
As the locals recently learned, the deli is the sole venture of a publicly traded company, Hometown International, whose investors include a shadowy cabal of financial entities in China—in addition to some of their Paulsboro neighbors.
The deli, as of today, is valued at more than $100 million.
Hometown’s eye-popping market cap can’t be explained by its sales.
The deli’s revenue, never spectacular, has fallen each of the last four years, from a high of $76,213 in 2016 to $13,976 last year, when it closed for several months because of the pandemic.
Yet even those numbers sound generous.
“I’ve never been there,” said Tina Kauffman, who lives two doors down. “I’ve lived here five years, and it’s never open.”
“I’ve come here seven, eight times,” added Paulsboro resident Ken Snyder. “Only one time it was open. But they said the cook was out.”
On a recent Saturday, at an hour when the deli’s Facebook page said it would be open, the doors were locked.
A woman inside said it was closed for a “private event.” She declined to say when the deli would be open next or how to contact the owners.
Many neighbors living within a few blocks of the deli refused to talk about it at all.
A man raking stones in his yard told me he had never been to the deli, but declined to give his name because “I don’t want someone throwing blocks through my windows.”The $100 million deli has been the talk of Wall Street since mid-April, when hedge fund billionaire David Einhorn cited Hometown as evidence of “quasi-anarchy” in financial markets and the impotence of industry regulators.
Subsequent reporting revealed that Hometown had taken $2.5 million from a series of Hong Kong firms, then spent hundreds of thousands of dollars on consultants with no obvious result.
While Hometown claimed in legal filings that it was looking for a company to acquire, perhaps to expand its “new ‘Delicatessen’ concept,” no merger target could be identified.
On Wednesday, the over-the-counter market where Hometown traded warned investors that it appeared the company was “not complying with the rules.”
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