Hometown International — the New Jersey company valued at more than $100 million on the stock market despite running just a single deli — is in fact a shell company that’s part of a complex, international reverse-merger plan, according to a report.
Peter Coker Jr., the Asia-based chairman and recently appointed CEO of Hometown, approached a Hong Kong hedge fund called Maso Capital Partners in early 2020 about using Hometown as a shell company for a reverse merger, according to the New York Times Magazine.
Reverse mergers allow a private company to go public by merging with a firm that’s already listed on a public market and essentially take the place of the pre-existing “shell.”
The process has been criticized for, among other matters, allowing companies to bypass the intense scrutiny and disclosure requirements of a traditional initial public offering.
In this case, the idea reportedly was to use Hometown’s listing on the over-the-counter US markets to give a foreign company access to American capital by merging with Hometown.
Manoj Jain, an alumnus of Credit Suisse and co-chief investment officer of the Hong Kong-based hedge fund Maso, confirmed to the Times that the firm still plans to execute a merger with Hometown.