Big Brother
2 years ago
If they had really been trying to hide what they were doing, they could have just put some small obscure Chinese company in there, with a bogus forward looking business statement......and no one would have ever given this another thought.
The deli was at least a real and verifiable business, located in the US, that's more than most of these shells and shell types do.....that are really just RM vehicles...... they are usually some tiny mystery business in Asia or Eastern Europe selling t-shirts or some other BS.
I just think given the massive amount of manipulation that occurs in penny stocks in general, market makers, stock promoters, traders, social media pumper groups, toxic convertible lenders, etc.....that what they did apparently did was pretty minor in the bigger scheme of things.
What about the scam companies that enter into to deals with toxic convertible lenders, then dump millions upon millions of shares into the market, those are the folks that need prosecuted.
Big Brother
2 years ago
Here we got the EWST chart, pretty similar to HWIN, loooong slow, steady climb, on overall very minimal volume, these are NOT what you would expect to see in stock promotion (p&d) type situations.
The charts almost look too good, so they could have been manipulated to an extent, as the SEC says, from an investors perspective, these are certainly very appealing charts, so that perhaps would have brought in some interest.....but not nearly to the extent of a pump and dump and you can tell that from the limited volume historically.
HWIN only falls off the cliff at the end of the chart, due to those bailing out after the SEC charges....but other than that, you'd be hard pressed to find anyone that purchased public shares that were hurt here IMO.
HWIN and EWST were clearly not some get rich quick schemes, those charts look like this.....much faster, meteoric rises and falls.
Big Brother
2 years ago
Yeah, pretty bizarre, looks like Coker and Co have lawyered up and pled 'not guilty'.
https://www.cnbc.com/2022/10/11/100-million-nj-deli-case-peter-coker-sr-james-patten-appear-in-federal-court.html
Personally, I'd love to see them exonerated here, or just a slap on the wrist, as overall this is hardly the crime of the century as the media is making it out to be.
These were the top 10 days of highest dollar volume for HWIN in its history, since it started trading in 2019. This is nothing and certainly shows there was no pumping or dumping as the only real volume came after it was alerted by Einhorn himself, not Coker and Co.
2021-04-19--$212,659.42
2021-04-20--$152,749.05
2021-08-04--$91,219.36
2021-04-22--$68,600.32
2021-04-23--$43,483.84
2021-12-08--$42,764.15
2021-05-03--$38,341.87
2021-12-27--$36,000.00
2021-05-04--$32,031.35
2021-12-09--$29,771.80
By comparison, lets look at a real pump and dump(TZPC) in 2020, this was never suspended, no CE, no one ever prosecuted. This was trading at a few cents....ran to almost $40 dollar pps....and then back down to a couple of cents again.
TZPC
2020-12-03--$2,322,130.54
2020-12-09--$2,171,152.70
2020-12-11--$2,105,161.05
2020-12-04--$1,694,323.08
2020-12-14--$1,619,329.09
2020-12-02--$1,556,418.72
2020-12-15--$1,257,776.50
2020-12-08--$1,210,409.74
2020-12-10--$887,342.38
2020-12-23--$462,573.99
Who got hurt more, investors in TZPC or HWIN..... the investors in HWIN were only hurt by the CE, the negative news by Einhorn, and the SEC's lawsuit......not by any pumping or dumping.
Big Brother
2 years ago
They may have manipulated the chart, pps and market cap to a degree but it's nothing that unusual really, we see it all the time with low float stocks, especially new issue.
I think the prosecution is going to have a hard time finding many folks that got hurt in HWIN, especially given that something like 60K shares total traded in it's entire history.....in approximately 77 weeks.....before Einhorn alerted it.
I'm sure they dumped quite a few shares, right after after Einhorn brought publicity to HWIN, people may have lost some $$$s there, as they could not really sell due to the CE killing any liquidity, OTCM quickly slapped a CE on it after Einhorn.....but that was a gamble they took, they already knew it was suspect.
Whole thing is crazy, if they get more than a fine I'd be surprised.
Renee
2 years ago
HWIN: (courtesy Samsamsamiam)
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=170045182
SEC Charges Father-Son Duo and Associate in Market Manipulation Schemes Resulting in a New Jersey Deli with a $100 Million Valuation
FOR IMMEDIATE RELEASE
2022-172
Washington D.C., Sept. 26, 2022 —
The Securities and Exchange Commission today charged Peter L. Coker Sr., Peter L. Coker Jr., and James T. Patten for their roles in orchestrating fraudulent manipulative securities trading schemes. These schemes included artificially inflating the share price of Hometown International, which operated a New Jersey deli producing less than $40,000 in annual revenue, from approximately $1 per share in October 2019 to nearly $14 per share by April 2021, leading to a grossly inflated market capitalization of $100 million.
According to the SEC’s complaint, Patten, Coker Sr., and Coker Jr., who was the former Chairman of the Board of Hometown International, took control of the outstanding shares of Hometown International and a separate shell company, E-Waste Corp., artificially inflated the price of both issuers’ stock through manipulative trading, and used the entities to acquire privately-held companies in reverse mergers, with the intent to thereafter dump their shares at grossly inflated prices. Before the defendants were able to reap the intended profits of the schemes, as alleged, numerous news articles were published discussing the issuers’ inflated stock prices.
“We allege that the defendants’ brazen schemes resulted in the artificial inflation of the stock price of two publicly traded companies with little to no annual revenues,” said Scott A. Thompson, Associate Director of Enforcement in the Philadelphia Regional Office. “Such manipulative schemes diminish the trust investors must have in the integrity of the markets, and we will pursue those who engage in such wrongdoing.”
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges all three defendants with violations of the antifraud provisions of the securities laws. The complaint also charges Patten with violating market manipulation provisions of the securities laws and charges Coker Sr. and Coker Jr. with aiding and abetting those violations. It seeks injunctive relief, disgorgement plus prejudgment interest, civil penalties, a prohibition against participating in any penny stock offerings, and an officer and director bar against Coker Jr.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Patten, Coker Sr., and Coker Jr.
The SEC’s investigation, which is ongoing, is being conducted by Cecilia B. Connor of the Philadelphia Regional Office with assistance from Leigh Barrett from the Office of Investigative and Market Analytics. It is being supervised by Assunta Vivolo and Mr. Thompson. The SEC’s litigation will be handled by John V. Donnelly and supervised by Gregory R. Bockin. The SEC appreciates the assistance of the Federal Bureau of Investigation, the U.S. Attorney’s Office for the District of New Jersey, and the Financial Industry Regulatory Authority.
https://www.sec.gov/litigation/complaints/2022/comp-pr2022-172.pdf
Big Brother
3 years ago
Yeah, even made the Daily Mail today.....unreal...lol.
I never realized just how ignorant people are to how the OTC market works, at least now it looks like they are waking up, so maybe the story will FINALLY go away.
HWIN investors may not have been hurt by a share price decline, however, many of these news agencies tried to spin it as a 'scam', without SEC investigators having found any wrongdoing(as far as we know), and this kind of tainted the shell IMO, and thus the shareholders are ultimately hurt by it. Which is rather disconcerting.....especially considering the story was really all about nothing.
IDK, any company that merges in, is likely to get some national media attention, maybe someone out there would like that......so hard to say how it will play out, maybe will still turn out OK, or maybe not. One thing is for sure, it definitely wont end well with the CE on there, so that really needs to go.
https://www.dailymail.co.uk/news/article-9645683/New-Jersey-deli-owned-high-school-wrestling-saw-valuation-soar-113MILLION.html#comments
Big Brother
3 years ago
I don't really find anything about this necessarily that odd at all, but these are the types of tickers I specifically follow.
It's true, most of the S1 filers, that were rather obvious RM vehicles, from 2015-2017, and there were quite a few, have pretty much all found mergers, acquisitions, or had changes of control by now. However, Asian RM's are notoriously, long and time consuming processes from my experience, and I'd guess COVID could have also played a role in the delay as well.
Still, there are shells out there that have taken an eternity to find mergers, SY_QH, just recently found one, and that had been an SEC filing shell for probably 15 years or more. So the time, or cost spent reporting does not really matter that much IMO.
Peter Lee Coker Jr and Manoj Jain are both part of the NASDAQ:DSACU( Duddell Street Acquisition Corp) SPAC, so I'd imagine they acquired OTC tickers like EWST and HWIN to use as RM vehicles, for other target companies that perhaps did not meet the criteria and/or guidelines for that particular vehicle.
https://www.dsac.co/
Big Brother
3 years ago
First decent article I've seen yet. Anyone who actually read the filings.. and... has half a brain, could see this is an RM vehicle, and about the closest thing to a SPAC that the OTC has.
Shocking how big and blown out of proportion this story has been, I don't think I've ever seen a bigger story about nothing, just beyond ridiculous. Dozens and dozens of companies have gone public over the past 10 years that I have been following new trading OTC tickers, that had one purpose, to be used in RMs, and many, if not most, of those were not technically classified as shell companies, it's not even remotely unusual.
All the problems going on in the World and people keep harping on the '$100 million dollar deli'......a story about nothing....good grief....lol.
Maso Capital's co-chief investment officer Manoj Jain told the Financial Times that Hometown International is targeting a deal that would be worth between $300 million and $600 million, and that its OTC structure will save it millions of dollars, given how costly setting up an actual SPAC investment vehicle can be.
"[Hometown] is a more flexible structure...with a longer time to find a target, and a better economic uplift," Jain said. Most SPAC vehicles only give the managers two years to locate and execute a deal, or else they are required to return investors money. A corporate shell that is seeking a reverse merger has no such time requirement.
"It works like a mini-SPAC. When you execute the merger, the name changes, the ticker changes, the board changes, the management changes, everything changes, as the merged entity enters the US capital market," Jain explained.
Big Brother
3 years ago
I have no idea how it will all play out, I just feel like they have been unfairly lambasted by the media, Einhorn, and OTC Markets.
Personally, I hope they are exonerated, HWIN and EWST are really two of the few bright spots in a pretty dismal OTC new issue/IPO type market. HWIN started trading @ $1.00 and EWST .02, so both were big winners for early investors, who like to trade newer OTC stocks. Granted they are thinly traded, but have been overall just very solid plays, no pumping or dumping, or any other nonsense, at least that I can see from a trading perspective.
I guess some out there may see 'manipulated charts' but to me, it just looks like smart sellers.
Be interesting to see what happens, I hope it goes well for Coker and Co. but if the SEC looks hard enough I'm sure they can find red flags on pretty much every OTC company out there. Whether or not that happens remains to be seen.
Big Brother
3 years ago
I roughly did the math from 10/25/2019 - 4/15/2021(pre-Einhorn) the stock traded about 60K shares total in it's entire history...in approx 77 weeks, that's less than 800 shares a week.....not 1500 a day, that's hardly big money, or a major public interest concern IMO.
Someone can double check if they would like.
These are the top 15 highest dollar volume days in company history, 6 of them are post-Einhorn days.
2021-04-16--499,358.59
2021-04-19--212,659.42
2021-04-20--152,749.05
2021-04-22--68,600.32
2021-04-23--43,483.84
2021-01-14--25,029.60
2021-01-27--24,370.80
2021-01-25--19,607.00
2021-01-21--17,093.20
2021-04-21--15,297.34
2021-01-28--15,009.00
2021-01-20--13,960.00
2021-02-26--12,465.00
2021-01-19--12,458.00
2020-06-15--11,536.62
Big Brother
3 years ago
Perhaps, but that's generally not the typical OTC 'scam' way, which is to pump and dump, which has not occurred here at all based on the volume.
Plus, if you look at their other tickers, they have extremely low floats, only 150K and 5K shares, and thus very low risk for investors, and they actually cancelled virtually all of the unrestricted shares when they recently took over MDVP. Again, which is not what I'd usually expect to see in a OTC 'scam'.
Additionally, you got Peter L Coker Jr on the board, as a director of Duddell Street Acquisition Corp(NASDAQ:DSAC)a Special Purpose Acquisition Company, OTC scammers are not generally found in Big Board stocks as well, they usually stick to the OTC.
https://www.otcmarkets.com/stock/MDVP/security
On February 4, 2021, in connection with, and as a condition to, the consummation of the Kynson Share Sale Transaction described in Note 1, eleven shareholders of the Company returned an aggregate of 4,345,000 shares (the “Cancelled Shares”) of the Company’s Common Stock to the Company for cancellation, in consideration for $0.001 per share. The Cancelled Shares were returned to the Company’s number of authorized and unissued shares of Common Stock.
Big Brother
3 years ago
I don't know, can't put my finger on it but nothing about the whole story makes any sense.
Why does Einhorn bring international attention, about dangers in the stock market, to an extremely obscure company, that had never traded more than 1,900 shares a day in it's history.....and had really never done anything but go up since it started trading @ $1.00 back in 2019, so it's unlikely any public investor had actually lost any money in it...??
Not to mention the deli was essentially irrelevant anyway, as it's in the filings that they are seeking a merger or acquisition, so the deli was never the end game, it was probably more likely an Asian merger/acquisition. There are multiple new issue OTC companies that do this every year, they go public and are used in RMs, there is nothing necessarily odd about this.
There is no question looking at the stock volume history, that Einhorn's awareness generated the volume spike....but why HWIN, there has to be more to the story IMO. Maybe what he thought was an easy short opportunity, did not work out as he expected?? Or maybe he needed the volume for some reason, you know the old saying 'any publicity is good publicity'..... especially for an illiquid stock.
Clearly Einhorn's awareness has been good for some sellers, as he brought volume.....but not good for the company itself, so overall just a very bizarre story.
Big Brother
3 years ago
The sellers on 4/16, 4/19 and 4/20 benefited the most from Einhorn's article, as it created by far the top 3 highest volume days in company history, and it did not really have much of a negative effect at all.
Before the article, the stock rarely ever traded much at all historically.
If the SEC is going to investigate, I'd look into those that profited the most, those 3 days.
Big Brother
3 years ago
If it is a 'share selling scheme' they have done a terrible job as these are the top 14 highest volume days pre-Einhorn, since it started trading on 10/25/2019.......never even topped 2K shares traded in a day.
2019-10-25--1,900
2021-01-14--1,801
2020-03-20--1,800
2021-01-27--1,766
2019-11-14--1,500
2020-06-15--1,431
2021-01-25--1,400
2020-04-01--1,361
2021-01-21--1,234
2020-05-14--1,200
2021-01-28--1,100
2021-01-20--1,000
2020-04-06--1,000
2020-01-24--1,000
These are the post-Einhorn volume days.
2021-04-16--42.76k
2021-04-19--14.99k
2021-04-20--12.47k
2021-04-22--6,223
2021-04-23--3,399
2021-04-21--1,264
Thus one could surmise that it was Einhorn who brought the volume, not the company.
Big Brother
3 years ago
Don't have HWIN or EWST either, I just find the whole thing absurd. I can imagine idiots have probably been calling the high school or deli, harassing some sandwich maker, or waitress saying this is a 'scam' and all because of an entitled clowns actions. If its a 'scam' let the SEC look into it and make that decision, and if not, let them go about their business.
Big Brother
3 years ago
Not sure there is much they can do, OTC Markets can be very stubborn about removing a CE, I once even saw a company file a lawsuit against them, to try and get them to remove it, with no avail.
Assuming the SEC even does investigate, if they find nothing, then the CE should be removed, as it certainly hurts any RM chances, but there are no guarantees.
If everything is legit, then the shareholders got a raw deal, all because of some wealthy arsewipe with no clue how the OTC works.
Big Brother
3 years ago
EWST is a newer issue shell, with a 150K share float, of course it's going to be higher priced, this is not even remotely unusual at all, and I can point out dozens, and dozens of examples over the past several years.
These types of tickers usually have very few sellers, beyond the initial seed investors, if the sellers don't want to sell for peanuts, then they don't have too....so if speculators want to buy, then they have to pay a higher price, that's just the way the market works, supply and demand.
So the market cap is irrelevant, for both HWIN and EWST, IMO. If there is something fraudulent going, then the SEC will sort that out, it's not OTC Markets or David Einhorn to tell anyone what something should be valued at, or try and manipulate it to what price they think it should be.
Granted I will admit EWST, started trading a little sketchy, with a 150K share drop at .02, but I doubt a single public investor has actually lost even $1 in EWST or HWIN since it started trading, before Einhorn made his big stink, as they have been very thinly traded, no pumping or dumping that I've ever seen, not really even any major price swings.....just over all very solid.
I just think this is a dangerous precedent, the market determines the value, not OTC Markets or Einhorn.
Big Brother
3 years ago
What about the other ticker Coker is connected to, MDVP, where they took that one over, and then immediately cancelled 4,345,000 unrestricted shares, and returned those to the treasury, leaving a whopping 5K share float.....is that really the actions of a OTC scammer to reduce the float to the point it can not even be traded...??
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