Monday, April 19, 2021

Matt Levine wrote about the deli in today's newsletter

One of several topics:

Last Wednesday, when there was a single trade of 200 shares and Hometown closed at $13.90, you might have asked incredulously, “who’s paying $13.90 per share for this deli,” but the answer would have been “exactly one person, for reasons of their own.” But on Friday there were hundreds of trades, and almost half a million dollars’ worth of stock changed hands. And the stock barely budged. People were like “yes, $100 million deli, absolutely, I want to buy that.” Hometown went from a thinly traded pink-sheet deli that nobody had heard of, to a company that everyone had heard of exclusively because it was a poster child for market excess, and … people … bought … it? Like, a whole new class of investors was introduced to Hometown International specifically by a hedge-fund letter saying “small investors who get sucked into these situations are likely to be harmed eventually,” and they looked at it and decided they wanted to be harmed. “Yes, step on my neck, Hometown International.” David Einhorn warned people not to invest in Hometown International, even though it had never occurred to them to invest in Hometown International, but once they were warned not to they absolutely did.


When David Einhorn wrote about Hometown International on Thursday, it was absolutely not a good example of 2021 meme-stock wildness. It had a comically high price, but on almost no volume; it was weird, but it was not weird in a “why is everyone buying this stock” way. After he wrote about it, sure, now it’s a meme stock.