There’s a solitary New Jersey deli doing $35,000 in sales valued at $100 million in the stock industry

Hedge fund supervisor David Einhorn warned of dangers for retail investors that he sees in the industry, and one of his key illustrations was a little New Jersey deli with a sector capitalization of more than $100 million.

The Paulsboro, New Jersey-based Your Hometown Deli is the sole site for Hometown International, which has an eye-popping sector value despite totaling $35,748 in revenue in the final two a long time put together, in accordance to securities filings.

“A person pointed us to Hometown International (HWIN), which owns a solitary deli in rural New Jersey … HWIN attained a sector cap of $113 million on February 8. The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also takes place to be the wrestling coach of the substantial faculty future doorway to the deli. The pastrami need to be amazing,” Einhorn reported in a letter to consumers released Thursday.

Hometown, which seems to have started investing in 2019, according to FactSet, has shares that trade about the counter and seldom has far more than a few hundred shares modify fingers per working day. Typically, there are no trades logged in an full investing working day.

Nonetheless, the company’s marketplace cap is just above $100 million, according to FactSet.

Hometown did not instantly return a ask for trying to get remark designed to the phone range detailed in the company’s securities filings. A supervisor was not accessible to comment at the deli’s cell phone variety.

According to the firm’s most recent 10-K submitting, the company’s single place was closed from March 23 to September 8 of last year simply because of the coronavirus pandemic. During that time, the company’s stock cost rose to $9.25 for every share from $3.25 for each share. It last traded at just underneath $14 per share.

The organization sold 2.5 million shares last yr and has about 60 total shareholders, in accordance a submitting.

Hometown reported a lot more than $600,000 in fees final calendar year, up from about $154,000 in 2019. The corporation also reported a internet cash get of $2.2 million from funding functions, this sort of as providing inventory, in 2020.

Einhorn’s highlighting of Hometown will come as politicians, regulators and higher-profile investors have publicly fretted about the increase in specific kinds of shares around the past 12 months.

As a new wave of retail traders joined the market place in the latest months, particular goal acquisition firms have introduced at a document speed and some shares, like GameStop and Discovery, have witnessed wild swings following getting bid up by traders on Reddit or hedge funds.

The in excess of-the-counter inventory current market, often referred to as pink sheets and penny stocks, have traditionally been a dangerous location for investors. Shares of penny stocks have also soared in modern months.