Doug Henwood summarises aa article of Matt Levine

MattLevine's article. I did not read it completely;too long. https://www.bloomberg.com/opinion/articles/2021-04-19/everyone-loves-the-100-million-new-jersey-deli-except-david-einhorn-knottrmb

Doug Henwood's summary:

 https://www.facebook.com/749518284/posts/10158602377663285/

Remember that little deli in NJ that is the public face of a stock valued at over $100 million? No doubt it's a front for something or other, but we don't know what yet. In any case, it came to the world's attention when hedgie David Einhorn wrote about it in a letter to clients, as an example of how the market might be just a little bubbly? Well, guess what—Einhorn's letter prompted people to buy the damn stock.

From Matt Levine's Money Stuff:

"But then Einhorn published his letter, and Hometown became the laughingstock of financial media last Friday. And here is what happened:

Volume exploded, from 800 shares on Thursday to 42,762 on Friday. By Friday evening, Hometown had traded a total of about 70,000 shares in all of 2021; more than 60% of that trading happened on Friday.

The stock was down by 3.1%. It closed at $12.99, for a market capitalization of $101.3 million.

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.”[3] 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."