Wall Street is a very silly place sometimes.
I don’t claim to be any kind of investing expert. The last thing I “invested” in was an electric toothbrush to lower my dentist bills. But it is my understanding that most big-name companies on the US Stock Exchange are, well, big-names. Microsoft, Tesla, Apple, and so forth; all very large companies doing the big business. But apparently, it’s not that cut and dry, at least if a humble deli in New Jersey is any indication.
Your Hometown Deli, a modest delicatessen based in Paulsboro, New Jersey, is the single asset of Hometown International Inc., a food service supply company. In a normal, non-silly world, such a company probably wouldn’t even be public, let alone worth anything on Wall Street. But since we live in a cartoon, Hometown International currently has a market valuation of $100 million. That’s in spite of the fact that the company has only made a total of $35,748 in profits in the last two years.
“Someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey … HWIN reached a market cap of $113 million on February 8. The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also happens to be the wrestling coach of the high school next door to the deli. The pastrami must be amazing,” hedge fund manager David Einhorn said in a letter to clients published Thursday.
— Nick Maggiulli (@dollarsanddata) April 15, 2021
So how exactly did this happen? It’s not entirely clear. By all accounts, Hometown is a pretty average low-tier stock. Less than a hundred of its shares are bought or sold on a given day, if any change hands at all. The deli wasn’t even open for most of last year due to the pandemic. Some managers suspect the involvement of Reddit users, much like the infamous GameStop surge, but as of now, no concrete contributors have been nailed down. Maybe it really is just good pastrami. I’d try some.