--- title: The long, strange saga of the $100m deli - The Hustle description: A New Jersey deli may have been better off perfecting its pastrami. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/2104227147-HS-News-Brief_2022-09-28T220746.199Z.webp --- # The long, strange saga of the $100m deli ![Rob Litterst](https://thehustle.co/wp-content/uploads/2023/01/Rob-Litterst-pic.png?width=48&height=48&name=Rob-Litterst-pic.png) [Rob Litterst](https://hs-sbup.thehustle.co/author/rob-litterst) [Rob Litterst Twitter profile ](https://twitter.com/robbylit) Published: September 29, 2022 Updated: October 11, 2023 Your Hometown Deli was a seemingly modest sandwich shop with a “[mean cheesesteak](https://www.businessinsider.com/eating-at-the-100-million-new-jersey-deli-2021-4).” ![The long, strange saga of the $100m deli](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/2104227147-HS-News-Brief_2022-09-28T220746.199Z.webp?width=595&height=400&name=2104227147-HS-News-Brief_2022-09-28T220746.199Z.webp) Then, a memo from hedge fund manager David Einhorn exposed the deli as the sole holding of Hometown International, a public shell company valued at $100m+. This week, the Justice Department [charged](https://www.nytimes.com/2022/09/27/business/100-million-dollar-deli.html) three men involved with the company of securities fraud, per *The New York Times*. #### **So what the heck happened?** Back in 2014, this saga started with a real deli. But unlike most sandwich shops, [according to prosecutors](https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2022/09/26/hometownindictment_0.pdf), the owners were convinced by a friend with a finance background into incorporating the deli as a subsidiary under the umbrella of Hometown International. Instead of trying to make New Jersey’s best pastrami, this friend allegedly sought to use Your Hometown Deli as a vehicle for an obscure financial transaction called a reverse merger. A **reverse merger** is when a private company goes public by acquiring an already public shell company. #### **Hometown International was going to be that public shell** In 2019, the company went public on the **OTC Markets**, a stock market like the Nasdaq and NYSE but with crucial differences. - **First,** transactions take place between two parties rather than a centralized exchange, making it easier to manipulate share prices. - **Second,** the OTC doesn’t delist companies if they break rules. Prosecutors allege this lax environment allowed Hometown’s shareholders to manipulate its share price. So, despite the corporation owning just one deli with ~$40k in annual income, its stock soared [939%](https://www.cnbc.com/2022/09/26/three-men-charged-with-fraud-in-100-million-new-jersey-deli-scheme.html) from $1.25 per share in 2019 to $12.99 in 2021, just before Einhorn’s heavily publicized callout. #### **So what now?** Hometown International [completed](https://www.marketscreener.com/quote/stock/HOMETOWN-INTERNATIONAL-I-120797495/news/Makamer-Inc-completed-the-acquisition-of-Hometown-International-Inc-in-a-reverse-merger-transact-40009045/) a reverse merger with Makamer, a private bioplastics startup, in March. But given the indictment, its leaders may end up serving prison time instead of cashing in. **The worst part:** The deli [closed permanently](https://www.forbes.com/sites/dereksaul/2022/08/22/notorious-new-jersey-deli-once-worth-over-100-million-cut-cold-closes-doors/?sh=70f0e5ee61dd) after the Makamer merger, leaving locals with one less option for quality hoagies. Topics: [Restaurants](https://hs-sbup.thehustle.co/tag/restaurants) ## Follow us on social media prev next - ![Quiznos’ off-key Spongmonkeys are back](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/464136233-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-quiznos-spongmonkeys_20230723220935.webp) ### Quiznos’ off-key Spongmonkeys are back - ![All-you-can-eat your heart out: Buffets are back](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/777095377-httpsthdaily.s3.us-west-1.amazonaws.comfinal_size-Buffet_20230628220915.webp) ### All-you-can-eat your heart out: Buffets are back - ![Restaurants are hopping on the subscription bandwagon](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/1628870465-HS-News-Brief_2023-03-16T001233.167Z.webp) ### Restaurants are hopping on the subscription bandwagon - ![Gross pranksters hit sushi sales](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/911311136-HS-News-Brief_2023-02-15T023032.654Z.webp) ### Gross pranksters hit sushi sales - ![Why do restaurant workers fund a lobbying group that keeps their wages low?](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/189664282-HS-News-Brief_2023-01-19T011742.482Z.webp) ### Why do restaurant workers fund a lobbying group that keeps their wages low? - ![The world’s best restaurant is unsustainable](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/253727868-HS-News-Brief_2023-01-10T003017.565Z-scaled.webp) ### The world’s best restaurant is unsustainable - ![The Cheesecake Factory defies all odds](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/238051046-final_size-cheesecake-factory_20221229001411.webp) ### The Cheesecake Factory defies all odds - ![Restaurant service fees don’t always check out](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/231000508-HS-News-Brief_2022-11-03T001730.063Z.webp) ### Restaurant service fees don’t always check out - ![Sorry, night owls — restaurants are closing early](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/1292150460-HS-News-Brief_2022-10-30T225400.203Z.webp) ### Sorry, night owls — restaurants are closing early - ![The economic indicator that uses egg-and-cheese sandwiches](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/205457934-HS-News-Brief_2022-08-23T022203.413Z-scaled.webp) ### The economic indicator that uses egg-and-cheese sandwiches Pop up for Subscribe to The Hustle Daily Newsletter Subscribe to The Hustle Daily Newsletter Get the 5-minute news brief keeping 2.5M+ innovators in the loop. Always free. 100% fresh. No bullsh*t. JOIN FREE ### 100% Free CRM Nurture and grow your business with customer relationship management software. Signup for a free account Close modal ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Rob Litterst", "url" : "https://hs-sbup.thehustle.co/news/author/rob-litterst" }, "datePublished" : "2022-09-29T05:11:53.000Z", "headline" : "The long, strange saga of the $100m deli", "image" : [ "https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/2104227147-HS-News-Brief_2022-09-28T220746.199Z.webp" ], "mainEntityOfPage" : { "@id" : "https://hs-sbup.thehustle.co/news/09292022-hometown-international", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject" } } } ``` ```json { "@context" : "https://schema.org", "@id" : "#article", "@type" : "NewsArticle", "author" : { "@type" : "Person", "name" : "Rob Litterst", "url" : "https://hs-sbup.thehustle.co/author/rob-litterst" }, "dateModified" : "2023-10-11T19:48:50+0000", "datePublished" : "2022-09-29T05:11:53+0000", "headline" : "The long, strange saga of the $100m deli", "image" : [ "https://7355427.fs1.hubspotusercontent-na1.net/hubfs/7355427/The%20Hustle%20News/Assets/Images/2104227147-HS-News-Brief_2022-09-28T220746.199Z.webp" ], "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 112, "url" : "https://fs.hubspotusercontent00.net/hubfs/53/assets/hubspot.com/web-team/WBZ/Blog%202021/Images/Logos/HubSpot%20Logo%20112X112.svg", "width" : 112 }, "name" : "HubSpot", "sameAs" : [ "https://www.facebook.com/hubspot", "https://twitter.com/hubspot" ], "url" : "https://www.hubspot.com" }, "speakable" : { "@type" : "SpeakableSpecification", "xPath" : [ "//title", "/html/head/meta[@name='description']/@content" ] } } ```