$100 million New Jersey deli Hometown International disavows valuation

Hometown International, which has a bizarre $100 million stock market capitalization despite owning just one small deli in New Jersey, disavowed that valuation in a new financial filing Friday that said there was no basis to justify it.

The unusual move came after two weeks of news coverage about Hometown International’s seemingly unjustified valuation, and after CNBC detailed legal issues surrounding multiple people tied to the company.

It also came more than a week after the company’s thinly traded stock was demoted from the more prestigious OTCQB over-the-counter market trading platform and slapped with a “buyer beware” warning label because of irregularities in financial filings.

“The management of Hometown International, Inc. … disavows the price of its publicly quoted stock on the OTC Markets under the trading symbol ‘HWIN,'” the company said in an 8-K filing with the Securities and Exchange Commission late Friday afternoon.

“Management is aware of no basis to support the Company’s stock price, based upon its revenue or assets,” said that filing.

The document was signed by Hometown International Chairman Peter Coker Jr., who is based on Hong Kong.

Other recent SEC filing by Hometown International have been signed by its CEO and president, Paul Morina.

The 62-year-old Morina is the principal at Paulsboro, New Jersey, High School, where he also coaches that school’s renowned wrestling team. Hometown’s only other executive officer, Christine Lindenmuth, is an administrator at Paulsboro HS.

HWIN closed trading Friday on the Pink market at $12.55 per share, down 3.46%. Just 852 of its nearly 8 million common stock shares outstanding having changed hands.

At that price, Hometown International had a market capitalization of at least $101 million. If the number of stock warrants issued by the company are considered, Hometown International has a market capitalization of up to $2 billion.

But with 60 or fewer actual shareholders, minimal trading volume and so little actual revenue there is likely no chance that anyone could sell significant blocks of shares at anywhere close to $12 per share to anyone not already connected to the company.

The new SEC filing noted that Hometown International has repeatedly said in past filings that its deli in Paulsboro, located across the Delaware River from Philadelphia, “does not generate significant revenues.”

In fact, the Hometown Deli had reported sales of less than $37,000 in the past two full years combined.

“The Company’s shares have been quoted on the OTC Markets since 2019, and there has not been, nor is there, significant trading volume in the Company’s stock,” the filing said.

“Management consistently files and is current in its public filings with the SEC and intends to maintain its business plan as disclosed in those filing.”

That business plan reveals an effort to use Hometown International as a vehicle to merge or be acquired by another entity, possibly a private company, that would itself then would effectively be able to become publicly traded on U.S. stock markets.

“In April 2020, the Company raised $2,500,000 from several institutional investors and issued warrants to all of the Company’s shareholders,” the filing noted.

“Management disclosed that the proceeds from this private placement would be used to seek out other business opportunities, and if approved by the Company’s Board of Directors, to engage in a business combination with a private entity whose business presents an opportunity to create value for the Company’s shareholders.”

Earlier Friday, The Financial Times and CNBC both detailed how the investment arms Vanderbilt and Duke universities are among the major shareholders in Hometown International. The universities’ investments are overseen by Maso Capital, a Hong Kong firm.

Another set of entities in Macao, China, are, with Morina, the other largests shareholders in Hometown International.

E-Waste, a shell company with multiple connections to Hometown International, did not issue its own SEC filing Friday disavowing its sky-high market capitalization level, despite the fact that it has no actual business.

E-Waste closed trading at $8.50 per share, with no shares sold during the day. With 12.5 million common shares outstanding, E-Waste has a market capitalization of more than $106 million.

It is known that E-Waste, which recently said it will sell $2.5 million worth of shares, is like Hometown International being marketed as a vehicle for a reverse merger or special purpose acquisition company that would take advantage of its existing listing on a U.S. market.

If either Hometown International or E-Waste undergoes such a transformation, their stocks would likely be purchased for much less than their current trading prices, or liquidated in a way that also gave their current owners much less than their over-the-counter prices.

E-Waste currently trades, like the deli owner, on the Pink over-the-counter platform.

On Monday, both companies announced in SEC filings that they were terminating consulting agreements that had them making monthly payments to Tryon Capital LLC, a North Carolina-based firm whose partners including Peter Coker Sr., the father of Hometown’s chairman. Tryon was being paid $15,000 per month by Hometown International, whose major investors include the elder Coker, while E-Waste was paying the firm $2,500 per month.

Coker Sr. has personally loaned more than $200,000 to E-Waste, whose current chairman recently has worked as a patient transporter at a New Jersey hospital, and whose company mailing address is that of yet another company linked to the elder Coker.

Both Hometown International and E-Waste had noted the “recent negative press” about Tryon Capital, and “the principals of Tryon.”

CNBC recently had revealed that Coker Sr. has been sued in the past for allegedly hiding money from creditors and business-related fraud. He has denied those allegations.

In August 1992, Coker Sr. was arrested in Allentown, Pennsylvania, on multiple criminal charges after he allegedly exposed himself to three girls while driving around in the middle of the night near a school, according to The Morning Call newspaper at the time.

In 2011, Coker Sr.’s partner in Tryon Capital, Peter Reichard, was convicted in a scheme to illegally contribute thousands of dollars to the successful 2008 campaign for North Carolina governor of Bev Perdue, a Democrat.

The scheme involved the use of a bogus consulting contract between Tryon Capital Ventures and a fast-food franchisee who wanted to support Perdue. Coker Sr. was not charged in that case.

This is breaking news. Check back for updates.

Vanessa Bryant, Kobe’s widow, to launch Mambacita clothing line

Just weeks after announcing that Kobe Bryant’s estate has parted ways with Nike, the late NBA star’s widow, Vanessa Bryant, announced on Friday the introduction of her Mambacita clothing line.

Bryant said on her Instagram account that she will release the collection May 1, what would have been the 15th birthday of Gianna, or “Gigi,” Kobe and Vanessa’s daughter who died along with Kobe in a Jan. 26, 2020, helicopter crash.

Bryant said that 100% of the proceeds will go to the Mamba and Mambacita Sports Foundation, the nonprofit started in the memory of Kobe and Gigi to benefit underserved youth in sports.

Gigi’s nickname was Mambacita.

It’s unclear whether this is the beginning of a bigger launch, but Bryant said that unisex and children’s sizes will be available. The website offering the collection was down Friday afternoon, saying “internal error.”

Since May 2020, the Kobe Bryant estate has filed more than a dozen trademark applications, according to Josh Gerben, a trademark attorney and founder of Gerben Intellectual Property. “Over the past year, Vanessa Bryant, via a corporate entity in Kobe’s name, has been making trademark filings which indicate a desire to build a brand around Kobe and Gianna’s legacy,” he said.

Gerben said three trademarks are used in the pictures she posted that include the word Mambacita, the M logo and the 2 hearts logo. “Based on trademark filing activity … I would also expect to see more products launched soon,” he said.

“Ultimately, creating a clothing and footwear brand without a large corporate partner will be challenging. It is certainly not outside the realm of possibility, but there are challenges on the business side that make a partnership with an established company still seem like a strong possibility,” Gerben said.

Vanessa Bryant and Nike were at odds, according to sources. She was unhappy with the lack of availability of his products, a strategy shoe companies often use to spur demand. On April 20, Bryant told fans that despite leaving Nike, her hope is that Kobe’s fans will be able to wear his products for years to come.

“I will continue to fight for that,” she said in the post. “Kobe’s products sell out in seconds. That says everything.”

Disneyland reopening celebrated with custom Mickey ears and masks

Visitors walk between plexiglass as they enter Touch of Disney at Disney California Adventure in Anaheim, CA, on Thursday, March 18, 2021.

MediaNews Group/Orange County Register | Getty Images

There are few things so iconic that a simple silhouette can be instantly recognizable to anyone in the world.

That’s the power of Disney and its stalwart symbol Mickey Mouse, which has transcended from cartoon mouse to corporate emblem. When Disneyland and California Adventure reopened Friday for the first time in more than a year, a quick scan of the crowd showed how ubiquitous that 93-year-old mouse truly is.

In the six decades since Disney opened its first theme park, the company has fostered a distinct culture within its amusement locations. From how its cast members are instructed to go about their jobs to the ambiance of the different lands that make up the park, everything that Disney does is deliberate and in service of creating an unrepeatable experience.

Perhaps the most prevalent example of this comes in the form of wearable Mickey and Minnie ears.

Mickey ear hats have been a staple souvenir for Disney parks for decades. Created by Roy Williams for the Mouseketeers on “The Mickey Mouse Club” in the ’50s, getting a pair of classic black Mickey Mouse ears, with custom embroidering, has been a rite of passage for many parkgoers since Disneyland first opened in 1955.

In the mid-80s, Disney began to offer a headband version of these hats. However, it wasn’t until the park’s 50th anniversary that product developers redesigned the iconic ears. In celebration of the milestone, Disney offered a line of golden ears.

The golden hat became such a phenomenon that it inspired the company to make other versions for special occasions and holidays. Over the years, these classic keepsakes have evolved into coveted fashionable and Instagramable accessories.

A woman wears a pair of Mickey Mouse ears and a matching mask.

Disney

A top seller at the parks, Disney has worked hard to keep up with demand. The company has designed dozens of different pairs from simple sequined ears to pairs that honor fan-favorite characters and attractions. Most of the ears in Disney’s collection cost around $30 per pair. However, due to the popularity of these headbands, Disney has partnered with a number of designers to make limited edition specialty ears that can cost closer to $100.

These ears have become so popular that crafters have turned to Etsy to create and sell their own designs. In preparation for the reopening of Disneyland, many guests are shopping for specialty ears and masks to wear around the park.

To be sure, Disney is not the only theme park to lean heavily into merchandise. Universal Studios sells Hogwarts robes and Minions T-shirts at its parks and Six Flags has licensing agreements with Warner Bros.’ Looney Tunes brand. Still, there is something distinctive about Disney’s Mickey ears that set them apart from other souvenirs.

Wearing your fandom

These ears have become more than just a singular memento, but a major collectible for Disney parks fans.

Krissy Reynolds, a 35-year-old restaurant manager from Virginia, has a collection of more than 40 Mickey ears. The collection started with a pair of red and black sequined Minnie Mouse ears she acquired during a college trip.

“We do outfits to match what park we are going to each day and then match each other,” said Reynolds. “Like for Hollywood Studios, we do ‘Toy Story’ outfits with shirts and ears and hats or accessories.”

At Magic Kingdom, Reynolds, her husband Wesley, 43, and son Cayson, 8, dress as classic Disney characters like Mickey and Minnie. At Animal Kingdom, the theme is usually “Lion King.”

Her family typically spends five days at Walt Disney World and brings two or three ears from her collection to wear during the trip and purchases a few new pairs once she’s at the parks.

Krissy Reynolds, 35, and son Cayson, 8, celebrate at Mickey’s Not-So-Scary Halloween Party in Orlando, Florida.

Krissy Reynolds

Crafters meeting demand

For many like Reynolds, who spend multiple days at the parks either in Florida or California, one set of ears is not enough. And while Disney has a large selection of Mickey ear designs, the demand for unique headbands has grown so much that independent sellers have entered the picture.

Etsy, in particular, has become a hub for small business owners to sell customizable ears and ones based on niche characters. In the weeks leading up to Disneyland’s reopening, these sellers have seen a significant uptick in sales.

“Sales were come and go for most of the pandemic,” said Rachel Vega, owner of the Etsy shop Enchanted Story Ears. “It really picked up in January. I think as we started seeing things moving forward both with [Disney World being] open and the hopes of Disneyland opening up at some point.”

Vega, a high school orchestra teacher, has been selling handmade Mickey ears on the e-commerce site for about a year. Her best-selling product is a set of graduation ears, which feature a small black academic cap and can be customized with the graduate’s school colors. Her ears retail for between $35 and $40.

“I fell in love with making custom ears when making them for a sisters’ trip and decided to start the shop to sell the ears I make,” she said. “I love having ears that are unique and comfortable when I go to the parks and know there are many who feel the same. It’s definitely a method of personal expression at the parks.”

Searching for Mickey ears on Etsy brings thousands of results, from dainty, fairy-like headbands based on popular characters to fabric patterned ears with big bows and glitter.

Arisa, a student turned entrepreneur, has been selling her version of Mickey ears since March 2019. In two years, she’s made more the 900 sales from her shop Ears by Arisa.

Currently, her best-selling ears are based on Loki, Wanda Maximoff, Baby Groot and Rapunzel. Her ears sell for between $24 and $31 depending on the style.

“Since California has lifted bans on theme parks, more people have left me notes saying how excited they are to wear my ears for their upcoming trips,” she said. “I even received a few custom orders to have their ears match masks they have.”

During the pandemic, Disney-themed masks have also been a major profit driver for small businesses. Those visiting Disney’s parks during the pandemic have embraced the mask requirements and used it as an opportunity to wear their favorite fandoms proudly in public.

When Debra Dix isn’t working as a case manager in the workforce department of Goodwill, she’s sewing and selling masks. She started her shop in December 2020 and already has nearly 500 sales.

The majority of the fabric she uses for these masks are Disney-themed. Her two best-sellers right now are a Disney parks snacks pattern and an animal print Mickey design.

“I’ve definitely sold more masks in the last 2 months,” Dix said. “In most cases, customers will buy one mask, but lately my average has been three to five masks per order.”

These masks and ears are part of the Disney experience and can help parkgoers create lasting memories.

Meagan Remmes, 30, of Asheville, North Carolina, purchased a set of bridal Mickey ears to wear during her honeymoon trip to Disney World this year.

“We knew we wanted something special to commemorate that it was our honeymoon, and while the buttons are free, they’re not exactly a statement maker,” she said of her decision to pick up a pair of veiled white ears.

“It was either going to be Mickey ears or custom T-shirts, but everything we looked at didn’t quite feel like us,” she said. “Mickey ears were a simple solution that made us feel special in the most Disney way possible.”

U.S. to restrict travel from India effective May 4 amid massive Covid surge

People wearing personal protective equipment (PPE) carry the body of a person who died from the coronavirus disease (COVID-19), during a mass cremation, at a crematorium in New Delhi, India April 26, 2021.

Adnan Abidi | Reuters

The Biden administration will restrict travel from India as that country grapples with a gigantic surge in coronavirus cases, White House press secretary Jen Psaki said Friday.

The policy will take effect Tuesday, May 4, Psaki said in a statement. The administration made the decision on the advice of the Centers for Disease Control and Prevention, Psaki said.

While Covid infections and deaths have been on the decline in the U.S. as millions of Americans get vaccinated each day, India is in the grip of an unprecedented surge in cases.

India reported record daily death tolls from Covid on Wednesday and Thursday. The country is averaging about 3,050 Covid deaths per day, according to data compiled by Johns Hopkins University, though media reports indicate the official figure is being understated.

India has reported an average of about 357,000 new cases per day over the past seven days — up about 26% from a week ago, Johns Hopkins data show.

The country is battling a highly contagious Covid variant, known as B.1.617, which was first spotted in India. The variant, which contains two key mutations that have been found separately in other coronavirus variants, is believed by some to be behind the latest wave of infections.

The variant has since been identified in other countries, including the United States.

There are few nonstop flights between the U.S. and India. United Airlines is the only major U.S. carrier operating nonstop service between the two countries, with four daily departures to India. Air India has a similar number scheduled for next month, according to aviation data firm Cirium.

The new travel order isn’t expected to ban flights, but rather non-U.S. citizens or permanent residents who have recently been in India — a similar format as restrictions that have been placed on much travel from the EU, China and Brazil, according to a person familiar with the matter.

The Biden administration, facing bipartisan calls to help India get a grip on the staggering health crisis, announced this week that the U.S. is sending the country more than $100 million worth of Covid supplies, including 1,000 oxygen cylinders, 15 million N95 masks and 1 million rapid diagnostic tests.

But lawmakers are still ratcheting up pressure on President Joe Biden to do more for India. Members of the House Caucus on India and Indian Americans sent Biden a letter Friday, urging him to send the country additional resources, including vaccines.

“Our support for India to help beat back this latest wave is in the U.S. national interest as the pandemic will not end anywhere until it ends everywhere,” said the letter, which was signed by two Republicans and two Democrats on the House panel.

Psaki, in a gaggle with reporters aboard Air Force One on Friday afternoon, said two U.S. military planes filled with supplies landed in India that morning, adding that more was coming soon.

Secretary of State Antony Blinken reached out to his Indian counterpart in recent days, Psaki noted.

Asked about travel from India at a White House briefing on the pandemic earlier Friday, Covid response coordinator Jeff Zients said that the U.S. was “continuously monitoring the situation.” He added that America was “in very close contact with our foreign counterparts” and that it would “continue to follow the CDC’s science-based guidance on travel and other matters.”

CNBC’s Leslie Josephs contributed to this report.

Food and agriculture start-ups raised record $22.3 billion in 2020

Food and agriculture tech investor Arama Kukutai standing in a vertical farm built by Plenty in South San Francisco.

Courtesy: Finistere Ventures

Food and agriculture start-ups attracted a record $22.3 billion in venture funding last year — that’s twice as much as these segments raised in 2019, according to a comprehensive new study from Finistere Ventures and Pitchbook.

The Covid pandemic spurred investment in these industries rather than slowing it, according to Arama Kukutai, a partner at Finistere Ventures, which has exclusively invested in food and agriculture since its founding in 2005.

With people stuck at home due to health and travel restrictions, demand spiked for food e-commerce, such as meal kits and deliveries.

“2020 was the first year since 1994 in which the restaurant share of food consumption dropped versus in-home,” the Finistere study said.

Responding to these shifting trends, food tech funding flowed into related services.

Food tech companies raised around $17.3 billion across 631 deals for the year. Sixty-eight percent of that went to e-commerce and delivery businesses. Meal kits alone raised $6.2 billion, and e-commerce companies raised $5.3 billion within the food tech category. The largest deal last year was an $800 million round of funding for the Chinese group-buying app for groceries, Xingsheng Youxuan.

The world also saw how a crisis could disrupt the normal production, processing and distribution of food. Farmers had to dump milk and produce that couldn’t be shipped or stored, and conversely brick-and-mortar groceries had empty shelves after shoppers hoarded supplies.

Kukutai said that drove interest in growing food in controlled environments, such as vertical farms, where yields are predictable. These indoor farms are often built closer to the urban centers where much of the produce they grow will be consumed.

Agtech companies raised around $5 billion across 416 deals in 2020. The top 10 largest deals in agriculture tech included four rounds for indoor farming businesses, ranging from a $140 million round for Plenty to a $203 million round for Revol Greens.

Venture capitalists haven’t always been attracted to “agrifood.” Funds historically saw these businesses as capital-intensive and unlikely to generate big returns, although there were rare exceptions, such as Trinity Ventures’ investment in Starbucks years before its IPO in 1992.

Ethan Brown, founder, president and CEO of Beyond Meat.

Adam Jeffery | CNBC

In 2011, just $3 million in venture funding went to companies in agriculture tech, across a scant 42 deals, and $1 million in venture funding went to companies in food tech across 22 deals.

But that era has ended.

Historic deals that followed Starbucks’ lead attracted more and more venture investors to these sectors. For example, Monsanto acquired the weather data company Climate Corp. in 2013 for over $1 billion, and more recently, Beyond Meat made its public market debut. The plant-based meat company has seen its shares increase by more than 180% since its IPO in 2019.

Finistere was an early backer of Plenty, and other start-ups in their portfolio today are working on making meat in a lab from cultured cells (Memphis Meats), monitoring the health of hives in an apiary without disturbing any bees (Apis), and helping farmers identify threats to their crops early, using sensor-equipped drones and data analytics (Taranis).

Starbucks will now serve Oatly’s oat milk.

Starbucks

‘Peak cow’

CNBC asked Kukutai what trends are likely to wax or wane in 2021 where food and farming tech are concerned.

He worked for decades in agriculture before becoming an investor, and he grew up in New Zealand, where water pollution and cattle emissions are a growing concern. He said that 2020 may have been the year we reached “peak cow.”

The investor expects venture funding for alternative proteins and nondairy milk to remain strong throughout 2021. “Dairy and meat are still fundamental,” he noted. “But the way we produce them has a big environmental penalty.”

Alternative protein start-ups raised 2.6 times the money they did in 2019, clocking $3.1 billion in funding in 2020 compared with $858.7 million the year before.

Similarly, plant-based milks are soaring in popularity, with millennial and younger consumers decreasing purchases of traditional dairy along with beef, poultry and pork for environmental and health reasons.

Strong consumer demand should help keep investor interest and capital commitments high and lead to some attractive mergers and acquisitions for rising brands, Kukutai predicted.

Swedish vegan food makers Oatly recently filed to go public. The company’s oat-based milk is used as a dairy alternative by Starbucks, and former Starbucks CEO Howard Schultz was an early investor.

Finistere and Pitchbook’s 2020 Agrifood Tech Investment Review also notes that new kinds of alternative protein are in the works, made from cultured cells in a lab, rather than protein from plants or farmed insects.

By contrast, the investor said he expects funding to slow down in the second half of 2021 for many meal-kit, e-commerce and delivery businesses. His own fund has backed players in this space, including Good Eggs and Farmer’s Fridge.

Online ordering habits will continue well after the pandemic, now that people have gotten used to them, Kukutai said. But many businesses in this subsector managed to pull funding forward in 2020 to meet skyrocketing demand. They should be able to get through the next year of operations without raising more.

Instead, he’s expecting possible IPOs, SPACs or even M&A deals among some of these in 2021.

One of the nation’s largest indoor vertical farms is about to launch in Las Vegas and eventually span more than 200,000 square feet. It will be able to supply fresh produce such as salad greens to casinos and other customers.

Oasis Biotech

Climate awareness

In agriculture, Kukutai predicts that a renewed focus on climate change and carbon emissions will influence what investors choose to fund over the next year.

The largest venture round in ag-tech last year saw Indigo raise around $500 million for tech and services that help farmers capture carbon through regenerative agriculture practices and then sell carbon credits.

New climate-related reporting requirements and pressure from ESGs — funds that score companies based on environment, social and governance criteria, not just financials and growth potential — are forcing every kind of business to measure their environmental footprint carefully, reduce their impact where they can, and buy carbon offsets to become compliant with regulations otherwise.

While that means different things to different companies, in farming it’s all about carefully monitoring and controlling what you grow and the environment it grows in, the investor said.

In 2021, food producers are able to use more targeted technologies in the field — for example, irrigation systems that can sense what’s needed at the plant level and in the root system, and data from satellites, drones and other sensing platforms that help them predict, plan and protect what they grow.

As they begin using internet-connected devices in the field, they are also building large libraries of data to enable more accurate predictions on everything from yield to weather. All the tech gives farmers better control of their crops and businesses.

“When you control the environment, there is a lot you can do to make better tasting food,” Kukutai said. “And from a safety point of view, you can also protect plants from pathogens and bugs getting into them. That means less fertilizer and other inputs to treat them, which also means you’re preventing runoff of nitrogen, too. The more targeted and controlled you can be, the more virtuous.”

Gunter Fischer | Universal Images Group | Getty Images

Soaring lumber prices add $36,000 to the cost of a new home

Stacks of lumber are offered for sale at a home center on April 05, 2021 in Chicago, Illinois.

Scott Olson | Getty Images

As the housing market gets leaner, potential buyers are turning in record numbers to new construction, but several factors are making those homes pricier than ever before.

First is a major shift in the market’s composition due to the record shortage of existing homes available. About 1 in 4 homes for sale are now newly built, the highest share ever. Historically new homes make up about 1 in 10, but fierce buyer competition is behind that shift. Prices for new and existing homes are at record highs.

But it is not just competition fueling prices for new homes. The cost of what goes into the home is adding to it as material and land prices surge.

Lumber prices seem to set a new record almost daily, now up 67% this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm. And lumber doesn’t just go into framing a house. Those added costs hit cabinets, doors, windows and flooring.

Lumber prices are skyrocketing for various reasons beyond just high demand from homebuilders and remodelers. Lumber tariffs had prices already rising a year ago, but then when the pandemic hit, production shut down. The expectation was that housing demand would dry up for a long time. But instead, after a brief pause, it came roaring back. Homebuilders were caught off guard, as were lumber producers.

“Clearly, increasing the cost of imports via tariffs does not help the situation,” said Robert Dietz, chief economist for the National Association of Home Builders. “We need to do everything that we can to increase domestic supply, including producing more domestic lumber, as well as resolving the trade dispute. It is matter of housing affordability.”

The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.

Workers install roof trusses onto a new house in Arvada, Colorado.

Rick Wilking | Reuters

Some builders have said they are slowing production in the face of exorbitant costs, but single-family housing starts were up 41% in March year over year, according to the U.S. Census. Builders are clearly trying to ramp up production as fast as they can to meet soaring demand.

“We just have no supply in either the new home or resale market today,” Sheryl Palmer, CEO of homebuilder Taylor Morrison, said in an interview on CNBC’s “Worldwide Exchange.”

Palmer said she has seen demand rise across all geographies and all segments of the market, particularly first-time buyers and 55+ buyers. Builder costs, however, are out of control, she said.

“We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has,” said Palmer. “We are very anxious to see full capacity back domestically. I think if we can get the full supply on, we can get lumber to level out a bit.”

But it’s not just lumber. Prices of gypsum, which is drywall, are up nearly 7% from a year ago.

Steel mill product prices are at a record high, up nearly 18% in March year over year. It’s used for beams, sheet metal products and wiring.

The price of copper also set a record high this month and is 27% year to date.

And then there is land. The price per single lot is up 11% this year compared last year, because demand is so high and supply is low. New lot supply is down 20% from a year ago, according to Zonda, a real estate data and advisory firm.

The inventory is tightest in San Diego, Baltimore and San Francisco. Nashville is also now seeing one of the biggest drops in supply. Lot supply in 90% of the top markets tracked by Zonda is considered significantly undersupplied.

“There’s a literal land grab going on as builders are scooping up lots to better match housing supply with demand,” said Ali Wolf, chief economist with Zonda. “The lot supply shortage is real, and it is causing prices to rise and builders to move further into the suburbs.”

Wolf adds that the new housing market is underperforming its full potential, and will continue to as long as the lot shortage persists. Add higher commodity prices to that equation and the new home market will continue to struggle at a time when it should be reaping huge rewards from hungry buyers.

 

Duke, Vanderbilt, Rutgers have connections

Hometown Deli, Paulsboro, N.J.

Mike Calia | CNBC

The investment funds of two U.S. universities, Duke and Vanderbilt, own significant chunks of stock in the mysterious company valued at $100 million by the stock market despite owning only a tiny New Jersey deli.

Duke’s and Vanderbilt’s shares in Hometown International were acquired by their Hong Kong-based arms under the direction of Maso Capital Partners, itself a Hong Kong entity that is an investor in the deli-owning company, financial filings reveal.

The shares of Duke and Vanderbilt, among the biggest stakes in Hometown International, were acquired in the past year as part of what financial filings indicate is an effort to use Hometown International — as well as a shell company called E-Waste — as vehicles for private companies to become publicly traded on U.S. stock markets through either reverse mergers or similar maneuvers.

It is not clear whether Duke and Vanderbilt are among the would-be buyers of shares in E-Waste, which last week announced it was offering to sell stock for $2.5 million. E-Waste, which is tied to people connected to Hometown, and which has borrowed money from the deli owner, has no ongoing business, but despite that has a market capitalization of more than $100 million.

Manoj Jain, co-chief investment officer of Maso Capital, has sole voting and investment power for Hometown International shares held by the two universities, according to financial filings. Jain previously worked as a managing director at asset manager firm Och-Ziff, now known as Sculptor Capital Management.

The role of Duke and Vanderbilt as Hometown International shareholders was first reported by The Financial Times.

A third American university, Rutgers, pays $1,100 per month rent for office space on Mantua Avenue next to the Paulsboro, New Jersey, deli, CNBC has learned.

Paul Morina, CEO of the deli-owning company, is one of the partners in the landlord entity, Mantua Creek Group LLC.

The involvement of the three universities with Hometown International and the deli’s landlord raises more questions to the mystery surrounding Hometown, whose market capitalization of $100 million reflects — in no way at all — the underlying value of the deli it owns. That deli has had sales of just $35,000 in the 2019 and 2020 combined.

Rutgers’ rent

Office space rented by Rutgers next door to Your Hometown Deli in Paulsboro, NJ

Mike Calia | CNBC

The lease agreements with Rutgers and Hometown were signed by a man named James Patten, who works as an analyst for Tryon Capital, a North Carolina company controlled by Peter Coker Sr., the father of the chairman of the deli company, Peter Coker Jr.

Patten, who wrestled in high school with Morina, was barred from acting as a stock broker after a series of disciplinary actions, according to FINRA, the entity that regulates broker-dealers.

Duke and Vanderbilt shares

Hometown International’s most recent annual report, filed last month, shows that Duke’s entity, Blackwell Partners LLC — Series A, holds 1.38 million common stock shares in Hometown International. Duke holds warrants to purchase another 27.6 million shares.

Vanderbilt’s entity, Star V Partners LLC, holds 663,750 common shares in the company, with warrants to buy another 13.275 million shares.

The universities’ stakes, which include common shares and warrants, were acquired for about $2 million in total.

On paper, those common shares alone now are worth more than $26 million, given Hometown International’s recent closing price of $13 per share.

But Hometown’s stock is thinly traded, at best. For that reason, and because of the lack of any valuable asset other than its existence as a publicly traded company, it is likely impossible for anyone, including Duke and Vanderbilt, to sell their shares in large blocks for anywhere near the current trading price.

It is not clear whether Vanderbilt and Duke are among the recent buyers.

The strange case of Hometown International

CNBC in the past two weeks has detailed criminal cases, civil lawsuits and regulatory sanctions against people connected to Hometown International, whose listing on an over-the-counter market was removed last week because of irregularities in its financial filings.

Those filings show that the largest shareholders of Hometown International shares include a group of opaque entities in Macau, China, which are located on the same floor in the same office building there.

Earlier this week, as a result of CNBC’s articles, Hometown International and E-Waste terminated consulting agreements that were paying Peter Coker Sr.’s Tryon Capital $15,000 per month in the case of the deli owner, and $2,500 per month in the case of E-Waste.

Another company connected to Coker Sr., TM Medical Properties LLC on its website says that it leases space to multiple health-care related entities, including Vanderbilt Medical Center Clinics.

Coker Sr.’s Hong Kong-based son, Peter Coker Jr., among other positions has a board seat at Duddell Street Acquisition Corp., a company whose shares last fall began trading on NASDAQ, and which is affiliated with Maso Capital and its leadership.

Duddell Street Aquisition, whose name reflects the Hong Kong office location of Maso Capital, on its web site says it is “a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination.”

Berkshire’s annual meeting is Saturday with Buffett and Munger together again, shares at a record

Warren Buffett (L), CEO of Berkshire Hathaway, and Vice Chairman Charlie Munger attend the 2019 annual shareholders meeting in Omaha, Nebraska, May 3, 2019.

Johannes Eisele | AFP | Getty Images

Warren Buffett will kick off Berkshire Hathaway’s annual shareholder meeting this Saturday riding high, with shares of the conglomerate at a record and its myriad of operating businesses and equity investments primed to benefit from a reopening of the U.S. economy from the pandemic.

The event will be held virtually without attendees for a second time because of Covid, but this year, the 90-year-old Buffett is taking the meeting to Los Angeles so he can be by the side once again of Berkshire Vice Chairman Charlie Munger, 97, who resides there and missed the last annual meeting amid travel restrictions. It will be the first time that the annual meeting will occur outside of Omaha.

While the “Woodstock for Capitalists” will be missing the capitalists once again, the tone of the meeting may more likely resemble the meetings of old with shareholders clamoring for Buffett’s outlook on the world following such an unprecedented year and the Oracle more likely to oblige after holding back last year with the country just starting its fight through the deadly and uncertain pandemic.

“I hope there would be a pretty sharp contrast in the overall demeanor of the folks at Berkshire,” Cathy Seifert, a Berkshire analyst at CFRA Research. “Last year, there was a degree of an alarm just because this was an event that was very difficult to price. It was kind of written all over his face. This annual meeting, the tone from an underlying operational perspective should be more relaxed.”

(You can view last year’s annual meeting and the others at the Warren Buffett Archive.)

Berkshire’s other vice chairmen, Ajit Jain and Greg Abel, will be on hand to answer the three-and-a-half hours of questions as well. Berkshire’s B shares were up more than 1% on the week, bringing their return in the last 12 months to more than 47%.

Among the big topics shareholders will want answers on:

  • Airlines: His thoughts on the industry after revealing at last year’s meeting he sold his entire stake (with the shares then subsequently roaring back).
  • Deploying the $138 billion cash pile: Why he’s been buying back a record amount of Berkshire’s stock instead of making one large acquisition and what his plan is going forward.
  • Market outlook: His thought’s on the stock market’s overall valuation following the pandemic comeback
  • Bubbles?: Cryptocurrencies and the other possible market manias that have popped up amid the huge rush of retail investors into markets
  • Life after Buffett and Munger: Berkshire’s succession plan

Dumped airlines

“He might acknowledge that the velocity of this recovery was greater than anticipated,” said Seifert. “The airline disposal may have been a function of their belief that what’s going on in the airline industry may be secular and not cyclical. That’s the one fine distinction that investors may want him to make.”

While airline stocks have rebounded drastically over the past year, many argue that the industry may have indeed changed fundamentally due to the economic fallout and the road to a full recovery remains bumpy. United Airlines said this month that business and international travel recovery is still far off even as the economy continues to reopen.

“He may still be right about the airline industry with travel coming back slowly and there being too many planes,” said James Shanahan, a Berkshire analyst at Edward Jones. “Arguably he could still be right about that, but he’s certainly wrong on the stocks.”

New stock moves

‘Elephant-sized’ deal?

Succession

Amazon is spending big to take on UPS and FedEx

Amazon driver Shawndu Stackhouse delivers packages in Northeast Washington, D.C., on Tuesday, April 6, 2021.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

Amazon has long set its sights on being the fastest in the online delivery race. Its first-quarter earnings report on Thursday revealed just how much it’s willing to spend to get there.

On an earnings call with investors, Amazon CFO Brian Olsavsky said the company’s capital expenditures, which include things like logistics expansion and the costs of data centers, increased a whopping 80% over the trailing 12 months.

While the coronavirus pandemic pushed many businesses to slow spending, Amazon plowed profits back into physical expansion, growing its transportation and logistics presence across the country. Olsavsky said the company added more warehouses and grew its fleet of airplanes and linehaul trucks. Amazon also continues to grow its contracted delivery network, often distinguishable by blue Amazon-branded vans, to oversee more than 100,000 drivers.

All told, the company increased capacity of its in-house logistics operations, known as AMZL, by 50% year over year, Olsavsky said. Amazon expects to keep spending big in these areas throughout the remainder of 2021 and potentially into 2022.

Logistics expansion is critical for Amazon as it seeks to speed up deliveries and, in the future, make the business of delivering packages more cost effective. Olsavsky signaled that Amazon is making progress on that front, noting that “our cost right now is very competitive with our external options.” It’s unclear whether Amazon has closed that gap when it comes to rural areas, which significantly increase last-mile delivery costs compared to densely populated regions.

Amazon still relies on third-party providers like UPS, FedEx and the U.S. Postal Service to handle a portion of deliveries. But the company has steadily grown its fleet of planes, trucks and vans to inch closer to its shipping partners. One estimate last August suggested Amazon now delivers roughly two-thirds of its own packages.

By operating its own fulfillment and logistics network, Amazon can continue to optimize the process of preparing and delivering packages to shoppers’ doorsteps. In doing so, Amazon has already shifted from a two-day delivery model to one- and even same-day delivery.

“What we see which is very helpful is the ability to control the whole flow of products from the warehouse to the end customer,” Olsavsky told investors on the call. “It’s turned what normally was a batch process, where we would hand off a large batch of orders to a third party once a day, let’s say, to a continuous flow process where we continually have orders leaving our warehouses five, six times a day, going through middle mile and then to final delivery, either through our AMZL drivers or [contracted delivery] partners.”

Ultimately, these investments in fulfillment and logistics also strengthen Amazon’s “flywheel effect.”

Amazon’s increasingly end-to-end control of a package’s journey from warehouse to doorstep has meant that consumers “get more precise estimates of delivery” after they’ve placed an order, Olsavsky said. That makes things like Amazon’s Prime subscription service, which recently crossed 200 million paying members, worth the expense for consumers.

As shoppers continue to flock to Amazon, it pushes more businesses to have a presence on the site and, if they’re not already, buy ads and pay to tap into Amazon’s warehouse footprint. Amazon makes money from selling third-party seller services, by taking a cut of each sale and collecting fees from sellers who use its warehouses. Revenue in that segment surged 64% during the quarter.

Places where vaccinated people can travel: See the updated list

The list of places that’s welcoming vaccinated people is growing by the week.

Proof of vaccines is easing travel restrictions to some places, and is the only way travelers can gain entrance to others.

Yet from health forms to testing protocols, travel remains complicated even for the immunized. Rules differ from one country to the next. Some places reject certain types of vaccines, while others still require a quarantine period — often shortened.

Travelers almost always have to be fully vaccinated — which is commonly defined as two weeks following the last required dose. However, several places allow travel the same day as a second shot.  

All this is to say: Travelers should read the fine print before booking a trip abroad, which includes understanding Covid-19 protocols that may be stricter than what’s required at home.  

The U.S. CDC may have eased mask rules for fully vaccinated Americans who are outside, but other places, such as Greece, have not.

Stefan Cristian Cioata | Moment | Getty Images

A study by the rental search engine HomeToGo showed 54% of U.S. travelers plan on taking a trip within the first two months of getting vaccinated. Yet, the rise of Covid-19 variants is complicating matters.     

The U.S. Centers for Disease Control and Prevention recommends against traveling to all but 31 destinations in the world. The 31 places are currently under the CDC’s Level 1 travel advisory, which indicates the risk assessment level for Covid-19 is low there.

As of the publication date, only four of those places are on the list below, so a sizable chasm remains between where vaccinated travelers can go and where they’re recommended to go.

U.S. CDC Travel Recommendations by Destination

Level 1: Low — Travelers should wear masks, avoid crowds, etc.
Level 2: Moderate — Avoid all nonessential travel.
Level 3: High — Avoid all nonessential travel.
Level 4: Very high — Avoid all travel.

To be clear, vaccinated travelers can still contract Covid-19 (and possibly transmit it), so researching infection and vaccination rates at intended destinations is also advisable.

CNBC Global Traveler will update this list as new information is made public.

The Caribbean

  • Anguilla (temporarily closed)

Just 10 days after Anguilla halved its stay-in-place requirements for vaccinated travelers from 14 to seven days, the island closed its borders for two weeks due to a coronavirus outbreak. The British Overseas Territory, which had just 18 total Covid cases as of early March 2021, confirmed 62 new cases in the past two weeks, according to data compiled by Johns Hopkins University.

Vaccinated travelers pay $300 to enter Anguilla, while unvaccinated visitors pay $600.

Cavan Images | Cavan | Getty Images

Anguilla had previously announced that from May 1, incoming groups of 10 or more will be required to be vaccinated, and spa and gym services are only allowed if both guests and staff are fully vaccinated.  Starting July 1, everyone who is eligible to take a vaccine must be inoculated to enter.

Travel Level: 1

Starting May 8, Barbados is reducing quarantine requirements for vaccinated travelers to zero to two days. Children under 18 years old traveling with vaccinated parents are also allowed to enter. Vaccinated travelers traveling with unvaccinated companions must quarantine for a week or more if they choose to stay together.  

Travel Level: 4

Travelers can enter Belize if they test negative before or after arriving; vaccinated visitors needn’t test though.

Travel Level: 2

Starting May 15, travelers can avoid quarantine in the British Virgin Islands for four days if they test negative before and after arriving (results are estimated to take 24 hours), according to a press release. They must also provide evidence of an “approved” vaccine — such as AstraZeneca, Pfizer-BioNTech, Moderna or Johnson & Johnson, it said.

Travel Level: 1

The British Virgin Islands are one of few CDC Level 1 Covid destinations that are welcoming vaccinated travelers.

Karl Weatherly | DigitalVision | Getty Images

From May 1, vaccinated travelers will still need to test negative before and after arriving in Grenada and its dependent territories of Carriacou and Petite Martinique. Quarantine periods will be reduced from a week to no more than 48 hours, if they are vaccinated.

Travel Level: 1

North America

French Polynesia

American residents eligible to travel to French Polynesia are charged less for on-island Covid tests if they are vaccinated ($50 versus $120).

Dana Neibert | The Image Bank | Getty Images

Vaccinated travelers can avoid French Polynesia’s 10-day quarantine, but families with kids may be subject to it.

“Children 6 years old and older who are not vaccinated, nor immune or who test positive to the antigenic test will be quarantined, as well as the entire family with whom they are traveling,” said Carlson.  

Travel Level: 3

Europe

Some vaccinated travelers are expected to be welcome into the European Union this summer.

“All 27 member states will accept, unconditionally, all those who are vaccinated with vaccines that are approved by EMA,” European Commission President Ursula von der Leyen told The New York Times this week, referencing the drug-regulating European Medicines Agency

The agency has approved vaccines made by Moderna, Pfizer-BioNTech, Johnson & Johnson and AstraZeneca.

Nothing official has been announced yet. If the EU allows vaccinated travelers into the bloc, member states are free to impose additional testing and quarantine requirements.

Some countries in Europe have separately announced or indicated plans to welcome vaccinated travelers, including:  

Options abound here. Fully vaccinated travelers can enter without quarantine, as can those with negative Covid tests or proof of a past Covid infection. Everyone else can test upon arrival or self-isolate for 10 days. Tourists coming from outside of Europe’s Schengen zone must also show proof of payment for their hotel or accommodation to get into Croatia.  

Travel Level: 4

From May 10, travelers from most of Europe, the United States, Canada, Russia and other countries can bypass Covid testing protocols if they are vaccinated with Russia’s Sputnik V vaccine or vaccines approved by the EMA. Vaccinated travelers aren’t subject to quarantines even if they are close contacts with a positive Covid case, and vaccine protocols kick in the same day a vaccine is fully administered. Vaccine certificates, which must be uploaded before departure, are to be verified by border control services in the country of departure.

Travel Level: 4

Estonia allows travelers to avoid testing and 10-day quarantines if they’ve had Covid-19 or been vaccinated against the coronavirus in the past six months. Proof of vaccination can be shown by an immunization passport or certificate, and vaccines approved in a traveler’s country of residence or departure are accepted.

Travel Level: 4

French President Emmanuel Macron told “Face the Nation” on CBS News this month that the country will begin easing travel restrictions in May and is “working hard to propose a very concrete solution, especially for U.S. citizens who are vaccinated” by this summer.   

Travel Level: 4

All fully vaccinated travelers can enter Georgia if two requirements are met: they must enter by air and have not been in India in the past 14 days. India is experiencing a deadly second wave, which started in February.

Travel Level: 4

Greece is now welcoming travelers who present a negative polymerase chain reaction (PCR) test or vaccination certificate upon arrival. Vaccines made in “third countries” such as Russia and China — which have not been approved by the EMA — are accepted. However, only residents of Europe, the United States, the United Kingdom, Israel, Serbia, United Arab Emirates, Australia, New Zealand, South Korea, Thailand, Rwanda, Singapore and Russia can enter without isolating.

Though the Acropolis has reopened, Greece is currently under lockdown-type restrictions with a nighttime curfew and store and restaurant closures.

Matteo Colombo | Moment | Getty Images

Russian travelers are also required to test negative to enter, even if they are vaccinated. Further announcements are expected before Greece’s broader reopening on May 14.

Travel Level: 4

Vaccinated travelers and Covid recoverees can avoid quarantines if they pass a Covid test upon arrival. Proof can be in paper or electronic format. Those inoculated with vaccines made in China and Russia will not be accepted. From June 1, less stringent measures are to apply to residents of low-risk countries.

Travel Level: 3

Plans to welcome a limited number of vaccinated tourist groups in May — and to vaccinated individual travelers by July — could be in flux due to a recommendation to delay reopening plans by Israel’s Health Ministry this week. The proposal, which was prompted by dangerous Covid variants emerging around the globe, will be debated in an upcoming cabinet meeting, according to The Times of Israel.

Travel Level: 3

While Portugal’s mainland isn’t open to inoculated travelers yet, vaccinated travelers and Covid recoverees can enter Madeira, one of two autonomous regions of the country, without having to undergo Covid testing. The other region, the Azores, has no such provision. Plans for Portugal to welcome vaccinated travelers from the U.K. as early as May 17 have yet to be confirmed.

Travel Level: 4

While the small Mediterranean nation of Malta has indicated it may accept vaccinated travelers this summer, it hasn’t formally announced this yet. “In due course, it is expected that evidence of full vaccination … can be used instead of a negative Covid-19 PCR test certificate,” according to a statement from a governmental website.

Travel Level: 4

Tourists can enter if they show proof of being vaccinated, recovery from past infection or a negative PCR test taken within 72 hours from entering. Unlike most countries, Montenegro allows vaccinated people to enter seven days after the full dose is taken. Regional residents and Russians do not need a test to enter.

Travel Level: 4

Vaccinated travelers can bypass Poland’s 10-day quarantine if they hail from EU countries, Iceland, Liechtenstein, Norway, Switzerland, Georgia, Japan, Canada, New Zealand, Thailand, South Korea, Tunisia, Israel and Australia. Hotels are to remain closed until May 3, and only vaccines authorized in the EU are accepted.

Travel Level: 4

Travelers from Slovenia’s “red list” of countries (155 in total) can avoid a 10-day quarantine by presenting proof of vaccination, including those made in Russia and China. Time periods from the last dose vary from seven to 21 days depending on which vaccine was taken.    

Travel Level: 4

Middle East

Asia

Pre-flight Covid testing and quarantines aren’t necessary for vaccinated travelers anymore — but their uninoculated kids will need a test. Unvaccinated travelers can also avoid quarantines if they stay on an island where 60% of the population is vaccinated. The country’s Health Protection Agency will regularly publish a list of these islands, according to a statement from the Maldives’ Ministry of Tourism.

Vaccinated people are not subject to quarantines in the Maldives.

FilippoBacci | E+ | Getty Images

The announcement on April 16 stated only vaccines recognized by the World Health Organization — i.e. AstraZeneca, Moderna, Pfizer-BioNTech and Johnson & Johnson — were accepted. However, five days later, the Maldives’ Ministry of Tourism revised the statement to include vaccines “approved by [WHO] … or any other competent authority of the respective countries.”  

Travel Level: 4

Though it advises getting one, Nepal no longer requires vaccinated travelers to get a pre-flight PCR test. They must, however, take a post-arrival test.

Travel Level: 3

Thailand’s plan to reopen the island of Phuket in July — and waive quarantines for vaccinated travelers there — is being threatened by a wave of Covid outbreaks tied to Bangkok nightclubs and island beach parties earlier this month. The country’s total case count has more than doubled in the past month — from nearly 29,000 on April 1 to more than 63,000 as of April 29, according to data from Worldometer.

Travel Level: 2

The “teardrop island” created a handy flowchart outlining travel protocols for vaccinated travelers. For them (and their kids aged 12 and younger), testing requirements are reduced, and they are free to leave Sri Lanka’s “bio-bubble” — which is designed to prevent tourists from mingling with locals. That’s provided they test negative about 24-48 hours after arriving.

Travel Level: 2

A pilot program to reduce quarantines for vaccinated travelers from 14 to seven days is expected to launch in May, according to the Taiwan News. Participation is limited, and applicants will have to be vaccinated one month prior and likely need three Covid-related tests before and after arriving.

Travel Level: 1

Africa

Central and South America

Ecuador has registered more than 27,000 cases of Covid in the past two weeks.

Eduardo Fonseca Arraes | Moment | Getty Images

Vaccinated travelers can enter as can those with a negative PCR test (taken 72 hours prior to airport check-in) or proof of recovery in the past three months. Everyone aged 10 and above must show one of these and complete a health pass before arriving.

Note: the health pass doesn’t refer to the vaccination option yet.

Travel Level: 4

Editor’s note: This list includes countries that are easing travel restrictions for vaccinated travelers. It does not include countries which are open to all travelers, vaccinated or not.