A Sandwich Shop’s Baloney Valuation
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https://www.cnbc.com/2021/04/15/hometown-international-nj-deli-owner-worth-millions-in-stock.html
A corporation whose only operating business is a single deli in New Jersey is valued at $100 Million, at least on paper according to its over-the-counter stock price. That solitary deli shop did only $35k in sales combined in the last two years.
Read on, and you’ll see that the company booked losses totaling more than $778k in the last two years, mostly due to fees it paid out for consulting agreements. One such agreement is to its Chairman’s father’s consulting company, and the other to a Macau company.
As for who owns this highly valued corporation, aside from its CEO+CFO (a NJ high school wrestling coach) and the Chairman’s father, the remaining shareholders are various entities from Hong Kong, Macau, and China.
Not to say that there is any wrongdoing, just that this whole thing looks rather intriguing.
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Sounds kind of "fishy". I am not sure how individual stocks work, but something is not right.
It is almost if I formed a company and then had my relatives in Taiwan "buy" the shares. Then they would "sell" them, and another relative would "buy" them at an higher price, continuing to increase the value of the company. Is that how it would work?
