Hometown International, whose operations consist entirely of a single New Jersey deli, is a publicly traded company valued at nearly $100 million. jenwieczner reports on what exactly is going on
Photo: Google By deli standards, Your Hometown Deli in Paulsboro, N.J., is not a very successful one. Then again, Your Hometown Deli is not your ordinary deli, nor does it seem to be much of a deli at all.
This set of facts has some observers wondering whether Hometown really wants to be a deli at all, or whether it’s just masquerading as a sandwich shop to keep up appearances that it’s a functioning business. In other words, they speculate, Your Hometown Deli may be a stalking horse in a kind of accounting game aimed at fast-tracking another — most likely foreign — company to the U.S. public markets, all while flying under the radar of regulators.
To be clear, people have eaten the food at Your Hometown Deli. Its Facebook page has 19 reviews, which give the deli an average rating of “5 out of 5.” But to make as little as $22,000 in revenue for an entire year, Your Hometown Deli would’ve had to only have sold slightly more than five of its “amazing,” “genuinely delicious” cheesesteaks a day, or less than one an hour — and nothing else at all.
Days later, a report from CNBC revealed a laundry list of legal problems involving people connected to Hometown. That included the lawyer, Gregg Jaclin, who originally filed the documents for the company’s first stock offering in 2015. Jaclin was disbarred last year after pleading guilty to obstructing justice related to Securities and Exchange Commission charges of “running a fraudulent shell-factory scheme,” involving taking “sham companies” public and then selling them.
One obvious question around Hometown’s inflated valuation is whether insiders at the company have been bidding up the stock for their own gain — what’s known as a pump-and-dump scheme. This would involve trading shares to each other at higher and higher prices with the aim of eventually dumping them on gullible retail investors.
Hometown International, on its regulatory documents, says it’s not a shell company. But when the company first sought to register with the SEC in 2015, the regulatory agency did not agree with that assertion, writing in a letter that the company’s activities “do not appear to constitute more than nominal operations.”
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