Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC
The investment funds of two U.S. universities, Duke and Vanderbilt, own significant chunks of stock in the mysterious company valued at $100 million by the stock market despite owning only a tiny New Jersey deli.
Duke’s and Vanderbilt’s shares in Hometown International were acquired by their Hong Kong-based arms under the direction of Maso Capital Partners, itself a Hong Kong entity that is an investor in the deli-owning company, financial filings reveal.
The shares of Duke and Vanderbilt, among the biggest stakes in Hometown International, were acquired in the past year as part of what financial filings indicate is an effort to use Hometown International — as well as a shell company called E-Waste — as vehicles for private companies to become publicly traded on U.S. stock markets through either reverse mergers or similar maneuvers.
It is not clear whether Duke and Vanderbilt are among the would-be buyers of shares in E-Waste, which last week announced it was offering to sell stock for $2.5 million. E-Waste, which is tied to people connected to Hometown, and which has borrowed money from the deli owner, has no ongoing business, but despite that has a market capitalization of more than $100 million.
Manoj Jain, co-chief investment officer of Maso Capital, has sole voting and investment power for Hometown International shares held by the two universities, according to financial filings. Jain previously worked as a managing director at asset manager firm Och-Ziff, now known as Sculptor Capital Management.
The role of Duke and Vanderbilt as Hometown International shareholders was first reported by The Financial Times.
Financial records show that the same Duke and Vanderbilt investment vehicles that are shareholders in the deli owner previously had been listed as substantial shareholders along with Maso Capital in Paladin Energy, an Australian company that had uranium mining operations in Africa.
They also show that the Duke and Vanderbilt entities hold shares in a so-called special purpose acquisition company, Duddell Street Acquisition Corp., which Maso Capital created last year and which began trading on NASDAQ.
A third American university, Rutgers, pays $1,100 per month rent for office space on Mantua Avenue next to the Paulsboro, New Jersey, deli, CNBC has learned.
Paul Morina, CEO of the deli-owning company, is one of the partners in the landlord entity, Mantua Creek Group LLC.
The involvement of the three universities with Hometown International and the deli’s landlord raises more questions to the mystery surrounding Hometown, whose market capitalization of $100 million reflects — in no way at all — the underlying value of the deli it owns. That deli has had sales of just $35,000 in the 2019 and 2020 combined.
Rutgers’ rent
Rutgers’ space is being used for a study of Paulsboro’s drinking water by the university’s School of Public Health, which is being conducted with the federal Centers for Disease Control and Prevention and the federal Agency for Toxic Substances and Disease Registry.
Rutgers, a public university based in New Brunswick, New Jersey, is paying Mantua Creek Group rent under a 24-month lease that began last September. The Rutgers study’s office is at 541 B Mantua Ave., while the Hometown Deli is at 541 A Mantua Ave.
Hometown International itself is paying Mantua Creek Group $500 per month for the deli space.
The Paulsboro Wrestling Club and the Monster Factory professional wrestling school are located at 541 C Mantua Ave., in a separate building.
Morina, the Hometown International CEO, is also the principal of Paulsboro High School and head coach of its renowned wrestling team.
A Rutgers spokeswoman said she had no information about how the university chose the location for its office in Paulsboro.
Office space rented by Rutgers next door to Your Hometown Deli in Paulsboro, NJ
Mike Calia | CNBC
The lease agreements with Rutgers and Hometown were signed by a man named James Patten, who works as an analyst for Tryon Capital, a North Carolina company controlled by Peter Coker Sr., the father of the chairman of the deli company, Peter Coker Jr.
Patten, who wrestled in high school with Morina, was barred from acting as a stock broker after a series of disciplinary actions, according to FINRA, the entity that regulates broker-dealers.
Duke and Vanderbilt shares
Hometown International’s most recent annual report, filed last month, shows that Duke’s entity, Blackwell Partners LLC — Series A, holds 1.38 million common stock shares in Hometown International. Duke holds warrants to purchase another 27.6 million shares.
Vanderbilt’s entity, Star V Partners LLC, holds 663,750 common shares in the company, with warrants to buy another 13.275 million shares.
The universities’ stakes, which include common shares and warrants, were acquired for about $2 million in total.
On paper, those common shares alone now are worth more than $26 million, given Hometown International’s recent closing price of $13 per share.
But Hometown’s stock is thinly traded, at best. For that reason, and because of the lack of any valuable asset other than its existence as a publicly traded company, it is likely impossible for anyone, including Duke and Vanderbilt, to sell their shares in large blocks for anywhere near the current trading price.
It is not clear whether Vanderbilt and Duke are among the recent buyers.
A spokeswoman for Duke, located in Durham, North Carolina, declined to comment, as did a spokesman for Maso Capital.
Vanderbilt, located in Nashville, Tennessee, had no immediate comment when contacted by CNBC.
Anders Hall, vice chancellor for investments and chief financial officer at Vanderbilt, previously handled investments at Duke.
People connected to Hometown have for weeks refused to return calls and emails seeking comment from CNBC.
The strange case of Hometown International
CNBC in the past two weeks has detailed criminal cases, civil lawsuits and regulatory sanctions against people connected to Hometown International, whose listing on an over-the-counter market was removed last week because of irregularities in its financial filings.
Those filings show that the largest shareholders of Hometown International stock include a group of opaque entities in Macao, China, which are located on the same floor in the same office building there.
Earlier this week, as a result of CNBC’s articles, Hometown International and E-Waste terminated consulting agreements that were paying Peter Coker Sr.’s Tryon Capital $15,000 per month in the case of the deli owner, and $2,500 per month in the case of E-Waste.
Another company connected to Coker Sr., TM Medical Properties LLC on its website says it leases space to multiple health-care related entities, including Vanderbilt Medical Center Clinics.
Coker Sr.’s Hong Kong-based son, Peter Coker Jr., among other positions has a board seat at Duddell Street Acquisition Corp., the Maso Capital-linked SPAC firm whose shares last fall began trading on the Nasdaq.
Duddell Street Acquisition, whose name reflects the Hong Kong office address of Maso Capital, on its website says it is “a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination.”