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Alibaba will buy Chinese food delivery app in an implied $9.5 billion deal

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Chinese e-commerce giant Alibaba Group said on Sunday it would buy all shares that it does not already own in food delivery platform Ele.me.

The deal implies an enterprise value of $9.5 billion for Ele.me, Alibaba said in a statement.

Ele.me, which roughly translates as “Hungry?”, is part of a fast-growing — though fiercely competitive — market in China being driven by consumers eager to make purchases on their smartphones, from groceries to cinema tickets.

Currently, Alibaba and its affiliate Ant Small and Micro Financial Services Group own about 43 percent of the outstanding voting shares of Ele.me, according to the statement.

— CNBC contributed reporting.

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After speaking with Biden, Netanyahu suggests Israel’s assault in Gaza will persist

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A member of the Palestinian civil defence walks amidst the rubble of a building in Gaza city which housed the Intaj Bank linked to the Hamas movement which controls the Gaza Strip, on May 15, 2021.

Mahmud Hams | AFP | Getty Images

President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas on Saturday as the violence in Israel and the Gaza Strip escalated with no sign that it would cease any time soon.

Separately, Netanyahu, after his call with Biden, suggested on television late Saturday local time that Israel’s operation will continue until it achieves its goals.

“Our aim is to send Hamas a message that it’s not worth sending rockets next time they want,” he said. “We will deal with them and no one should take the law into their own hands.”

During a phone call with Netanyahu, Biden reiterated his support for Israel’s right to self-defense against rocket attacks from the militant group Hamas in Gaza and condemned attacks in towns and cities in Israel, according to a readout released by the White House.

“The President noted that this current period of conflict has tragically claimed the lives of Israeli and Palestinian civilians, including children,” the readout said. “He raised concerns about the safety and security of journalists and reinforced the need to ensure their protection.”

Netanyahu told Biden that Israel “is doing everything to avoid harming” those who aren’t involved with Hamas and that “those not involved” were evacuated from the 12-story building in the Gaza Strip that housed the offices of The Associated Press and Al Jazeera. Three Israeli heavy missiles collapsed the building on Saturday.

The president also spoke with Abbas about tensions in Jerusalem and the West Bank and their shared interest in making Jerusalem “a place of peaceful coexistence for people of all faiths and backgrounds.”

“The President also underscored his strong commitment to a negotiated two-state solution as the best path to reach a just and lasting resolution of the Israeli-Palestinian conflict,” according to a readout from that call.

The extraordinary conflagration in Israel and the Gaza Strip has evolved into an urgent early test for Biden’s foreign policy. The president was working in the Oval Office for a periodd of time on Saturday. He usually works from Camp David or his home state of Delaware during weekends.

News that media offices were destroyed triggered international outrage and shock, prompting the White House to respond before the Biden readouts were released.

U.S. President Joe Biden speaks about the coronavirus disease (COVID-19) response and the vaccination program from the Rose Garden of the White House in Washington, May 13, 2021.

Kevin Lamarque | Reuters

The Biden administration has “communicated directly to the Israelis that ensuring the safety and security of journalists and independent media is a paramount responsibility,” White House press secretary Jen Psaki wrote in a tweet on Saturday.

The president of the Associated Press, in a statement Saturday, said a dozen AP journalists and freelancers evacuated the building before the strike, but a “terrible loss of life” was narrowly avoided even with advance warning from Israel that the building would be hit.

“We are shocked and horrified that the Israeli military would target and destroy the building housing AP’s bureau and other news organizations in Gaza,” said AP President and CEO Gary Pruitt. “They have long known the location of our bureau and knew journalists were there. We received a warning that the building would be hit.”

“This is an incredibly disturbing development,” Pruitt said of the airstrike.

Al Jazeera’s director general accused Israel of trying to silence the media and condemned the airstrike as a war crime, calling on the international community to hold Israel accountable.

“The destruction of Al Jazeera offices and that of other media organizations in al-Jalaa tower in Gaza is a blatant violation of human rights and is internationally considered a war crime,” said Dr. Mostefa Souag, acting director general of Al Jazeera Media Network, in an article posted on the news agency’s website.

“We call on the international community to condemn such barbaric actions and targeting of journalists and we demand an immediate international action to hold Israel accountable for its deliberate targeting of journalists and the media institutions,” Souag said.

“The aim of this heinous crime is to silence the media and to hide the untold carnage and suffering of the people of Gaza,” Souag said.

At least 139 people have been killed, including 39 children, in Gaza. And in Israel, eight people have been killed as conflict escalates.

Sen. Bob Menendez, D-N.J., chairman of the Senate Foreign Relations Committee, in a statement Saturday called for a “full accounting of actions that have led to civilian deaths and destruction of media outlets.”

“All political and military leaders have a responsibility to uphold the rules and laws of war and it is of the utmost importance for all actors to find ways to deescalate and reduce tensions,” he said. “This violence must end.”

— Reuters and Associated Press contributed reporting

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$100 million New Jersey deli company fires CEO Paul Morina

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Paulsboro coach Paul Morina cheers on George Worthy as he takes on Bergen Catholic s Wade Unger in the 152-pound bout during a wrestling match at The Palestra in Philadelphia,

Joe Warner | USAToday

The shareholders of the mystery $100 million New Jersey deli company Hometown International fired CEO Paul Morina — a high school principal and renowned wrestling coach — after weeks of questions about the firm and his role there, a financial filing revealed late Friday.

Hometown International’s majority shareholders also voted to remove the company’s only other executive, vice president and secretary Christine Lindenmuth, who works with Morina as an administrator at nearby Paulsboro High School. The deli, located just across the Delaware River from Philadelphia, is Hometown’s only operating business asset.

Their ousters came a week after a previously unreported resignation of the president of a shell company, E-Waste, which has multiple connections to to Hometown International

Securities and Exchange Commission filings show that the shareholders voting to remove Morina and Lindenmuth almost certainly included all or some members of two different groups of investment entities, one based in Hong Kong, the other based in Macao, a special administrative region in Hong Kong.

Morina, 62, held a slew of other titles at Hometown International before he was removed. According to financial filings, he owns 1.5 million common shares of the deli owner, making him, on paper at least, worth more than $18 million.

Morina was replaced as chief executive officer by Peter Coker Jr., who is Hometown International’s chairman.

Coker Jr., who is based in Hong Kong, is aligned with investment entities there that have major stakes in the deli owner.

Coker Jr.’s father, North Carolina businessman Peter Coker Sr., himself is a major investor in the company.

The related shell company E-Waste also has replaced its president, John Rollo, 66, after similar questions were raised by CNBC about him, that company and its similarly preposterous sky-high market capitalization despite a total lack of ongoing business.

Rollo, a Grammy-winning recording engineer, until recently was working as patient transporter at a New Jersey hospital.

Rollo, also a New Jersey resident, was replaced as E-Waste’s president by 31-year-old Elliot Mermel, a California resident who is getting paid $8,000 per month in that role.

Mermel’s colorful business background includes founding a company that raised crickets as human food, and a partnership in a cannabis-related business with Paul Pierce, the former Boston Celtics superstar basketball player.

Pierce, who won an NBA title with the Celtics, last month was fired as an analyst by ESPN for a racy Instagram Live poss that showed him in a room with exotic dancers.

On Saturday, the Boston Globe reported that Pierce will be inducted into the Basketball Hall of Fame as part of its 2021 class.

Mermel also founded a biotech company and an artificial intelligence company, and was a business development consultant to a fertilizer company, according to a financial filing.

Mermel, a Colby University graduate, has another company, Benzions LLC, that had been collecting $4,000 each month since December under a consulting agreement with E-Waste.

That agreement was terminated as part of his taking over management of E-Waste, according to a Securities and Exchange Commission filing on Thursday.

Boston Celtics forward Paul Pierce waves to the crowd after reaching No. 2 on the all-time Celtics scoring list, surpassing Larry Bird, during the second half of an NBA basketball game against the Charlotte Bobcats in Boston on Tuesday, Feb. 7, 2012. (AP Photo/Elise Amendola)

Elise Amendola

SEC filings show that Benzions in March signed another consulting agreement with a second shell company, Med Spa Vacations, connected to Peter Coker Sr., which likewise pays Mermel’s firm $4,000 per month.

CNBC has reached out for comment from Morina, Lindenmuth, Rollo, Mermel, Hometown International’s lawyer and a spokesman for the Hong Kong investors.

The current president of Med Spa Vacations is former E-Waste president Rollo, who took that job in February, according to filings.

The changes in executive leadership at both Hometown International and E-Waste were disclosed in 8-K filings with the SEC.

The deli owner’s filing gave no reason why shareholders who control 6 million shares of common stock — which represents about 77% of the company’s voting power — voted out Morina and the 46-year-old Lindenmuth. At least 5.5 million of Hometown International’s common shares are controlled by the Hong Kong and Macao investors.

Both Morina and Lindenmuth remain principals in the deli itself, according to the SEC filing.

Morina also is involved in an entity that leases the deli space to Hometown International.

E-Waste’s filing said that Rollo resigned as president on May 7, a day after CNBC reported on the opaque nature of the Macao group of investors.

Your Hometown Deli in Paulsboro, N.J.

Google Earth

The moves appear — like other recent ones by each of the money-losing companies — to be an attempt to eliminate controversial issues that could harm their joint goal of merging with other firms in a transaction that would exploit their status as publicly traded companies on U.S. markets.

Hometown International first drew widespread attention last month when hedge fund manager David Einhorn, in a letter to clients, pointed out the company’s market capitalization, which had topped $100 million despite owning only a single small Italian deli.

That eatery had sales of less than $37,000 in sales for the past two years combined and was closed for nearly half of 2020 due to the coronavirus pandemic.

Einhorn noted the incongruity of Morina being Hometown International’s CEO while working his day jobs as high school principal and wrestling coach.

Hometown Deli in Paulsboro, N.J.

CNBC

Morina’s team at Paulsboro high school is a perennial contender for state titles, and he is among the most successful coaches in New Jersey wrestling history.

But he has no apparent history of operating either a publicly traded company or food service business before the Hometown Deli opened in his own hometown.

However, Morina, whose brother is a New Jersey county sheriff, wrestled in the 1970s at Paulsboro High School with a man named James Patten, who works at Coker Sr.’s firm Tryon Capital.

Patten was barred by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers, according to the regulator’s database.

Before that sanction, Patten was the subject of repeated disciplinary actions by FINRA, which included not complying with an arbitration award of more than $753,000 for violating securities laws, unauthorized trading and churning a client’s account.

Since Einhorn’s letter, CNBC has reported other eyebrow-raising details about Hometown International and E-Waste, whose stocks, traded on the low-tier Pink over-the-counter market, in the past year have risen to stunning levels as ties have been formed between them.

Among those questions was why some investors would pay so much to buy shares in either thinly traded company, given their lack of meaningful revenue in the deli owner’s case, or, in E-Waste’s case, a lack of any revenue at all.

Even if both companies achieve their goal of engaging in reverse mergers or similar transactions with private firms looking to become publicly traded, current investors will not receive payments that reflect — in any way — the trading price of the stocks.

On Friday, just 205 shares of Hometown International were traded, closing at $12.40 per share. Given the company’s nearly 8 million shares of common stock outstanding, that gives it a market capitalization of $96.68 million.

E-Waste closed Friday at $9 per share, after no shares traded hands. With 12.5 million shares outstanding, E-Waste has a market cap of $112.5 million.

In recent weeks, both the deli owner and E-Waste disavowed their stock prices, saying in extraordinary SEC filings that there was no financial justification for their market capitalizations.

The moves followed the demotion of Hometown International from a more prestigious OTCQB over-the-counter market platform for what OTC Markets Group called “irregularities” in their public disclosures, and OTC Markets telling CNBC that it would be eyeing E-Waste as well.

A trio of Hong Kong investment entities led by Maso Capital, which last year became some of the largest investors in Hometown International’s biggest investors, are understood to be involved in likewise positioning E-Waste as a reverse merger candidate.

The Hong Kong investors include entities that are investment arms of Duke and Vanderbilt universities.

E-Waste’s biggest single investor, Macao-based Global Equity Limited, is also the largest investor in the deli owner, and in Med Spa Vacations, another shell company linked to Coker Sr..

The office building on Avenida Da Praia Grande in Macao, China, the address for multiple entities listed as investors in Hometown International, the owner of a single New Jersey deli.

Catarina Domingues | CNBC

Rollo remains the president of Med Spa Vacations, a shell company with no business operations whose office address is that of a business operated by Coker Sr.

Hometown International loaned Med Spa Vacations $150,000 in February, records show.

That loan came after E-Waste was loaned an identical amount by Hometown International in November, according to an SEC filing.

Records show that Coker Sr. loaned E-Waste $255,000 last September, most of which was used to pay the prior owners of E-Waste before they sold their shares to Global Equity Lmiited.

CNBC’s articles have detailed how Coker Sr., a former college basketball star who has refused to comment when contacted by a reporter, has been sued for allegedly hiding assets from a creditor to whom he owed nearly $900,000 and for business-related fraud. He denied wrongdoing in those cases.

He also has been arrested for soliciting a prostitute, according to a Raleigh, North Carolina, police report, and for exposing himself to and trying to proposition three underage girls, according to a 1992 newspaper article.

Peter Lee Coker mugshot from the Raleigh/Wake City-County Bureau of Identification (CCBI).

Source: Raleigh/Wake City-County Bureau of Identification

A firm controlled by Coker Sr., Tryon Capital, had until recently been collecting $15,000 a month from Hometown International under a consulting agreement. E-Waste was paying Tryon Capital $2,500 per month for its own consulting agreement.

Those agreements were terminated last month after CNBC articles described those deals and Coker’s tangled legal history.

SEC filings show that Med Spa Vacations is paying Tryon Capital $2,500 per month for its own consulting agreement.

Coker Sr.’s partner in Tryon Capital, Peter Reichard, in 2011 was convicted in a North Carolina court of his role in a scheme that facilitated the illegal contributions of thousands of dollars to the successful 2008 campaign for governor by Bev Perdue, a Democrat.

The scheme involved the use of bogus consulting contracts with Tryon Capital. Coker Sr. was not charged in that case.

Peter Reichard, a top Perdue aide, takes the oath before his apearance in Wake County Court, Wednesday, December 14, 2011 in Raleigh, N.C.

John Rottet | The News & Observer | AP

Reichard is also a managing member, with Coker Sr., of an entity called Europa Capital Investments, which owns 90,400 common shares of Hometown International, and has warrants for another 1.9 million shares.

Reichard is the son of Ram Dass, the late spiritual and LSD guru who gained renown in the 1960s and 1970s.

CNBC earlier this week detailed how Coker Sr. and Reichard in 2010 created eight shell companies that were later sold off to other owners.

Most of those shell companies, after they were sold, ended up having their registrations revoked by the SEC for failing to keep current in their disclosure filings, records show.

One of the companies ended up being owned by a real estate tax lawyer in New York named Allan Schwartz, who did work for former President Donald Trump decades ago in connection with Trump’s real estate holdings. Schwartz told CNBC he knew nothing about Reichard and Coker Sr., or the deli owner.

Hometown Deli, Paulsboro, N.J.

Mike Calia | CNBC

Records show that a securities lawyer named Gregg Jaclin was involved in the creation of those shell companies. Jaclin also was involved three years later in the creation of Hometown International.

Jaclin was disbarred as an attorney last year after pleading guilty to federal criminal charges related to his creation of shell companies to sell to individuals “who used those shell companies as publicly traded vehicles for market manipulation schemes,” court records show.

None of the shells in that scheme were one of the ones created by Coker Sr. and Reichard, or to Hometown International.

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Marqeta files S-1 as value tops $16 billion on private markets

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Marqeta Headquarters in Oakland, Calif.

Yalonda M. James | San Francisco Chronicle | Hearst Newspapers via Getty Images

Marqeta has become one of the hottest businesses in digital commerce, even though few consumers have ever heard of it.

Its name is about to become much more familiar. On Friday, the company filed to go public and, in its prospectus to investors, disclosed annualized revenue growth in the first quarter of 123% to $108 million, while its net loss narrowed to $12.8 million from $14.5 million a year earlier.

In 2020, annual revenue more than doubled to $290.3 million, and the company recorded a loss of $47.7 million.

Founded in 2010 and based in Oakland, California, Marqeta sells payment technology that’s designed to detect potential fraud and ensure that money is properly routed. The company issues customized physical cards that look like credit and debit cards, which contractors from DoorDash or Instacart use to make point-of-sale purchases from restaurants or supermarkets.

Many of Marqeta’s top customers are coming off record years as the pandemic pushed commerce to mobile devices. In addition to meal-delivery companies, Marqeta powers Square’s debit card for small business owners and its popular Cash App for peer-to-peer payments. Affirm and Klarna, which provide small-dollar lending to consumers for purchases like bikes and TVs, use Marqeta’s technology to move money with their installment loans.

Larry Albukerk, who brokers pre-IPO stocks at EB Exchange, said Marqeta shares have been trading on the secondary market for $33 to $35 each. Based on a total of 484.4 million Class A and Class B shares, as listed in the prospectus, that values the company at about $16 billion to $17 billion.

A year ago Marqeta raised capital at a valuation of about $4.3 billion.

“It’s definitely one of the hottest companies in the private markets,” said Albukerk, who also owns some Marqeta shares. “It’s been a steady performer for the last two years and recently has become one of the most sought-after stocks to buy pre-public.”

Albukerk said Marqeta is up there with Stripe and Plaid in terms of fin-tech stocks that investors are seeking, but Marqeta is the only one of the three that trades regularly because the other two companies are more restrictive with ownership transfers.

Marqeta competes on one end of the payment technology market with legacy vendors like Fiserv and FIS, and on the other end with modern vendors like Adyen and Stripe. Where Marqeta most differentiates itself is in its card-issuing service, which allows clients to create a very specialized physical or virtual card for their business partners.

The company says in the risk factors sections of its prospectus that its expansion in 2020 mirrored that of its clients in e-commerce and food and grocery delivery. As the economy reopens, spending patterns could change.

“Our net revenue growth in recent periods has increased, as additional consumers have shifted to using these services,” the company said. “If this trend in consumer demand and spending patterns slows or reverses as shelter-in-place restrictions ease and as the pandemic subsides, our net revenue growth may be adversely affected.”

Marqeta ranked 33rd on CNBC’s Disruptor 50 list last year.

WATCH: Marqeta CEO Jason Gardner on partnership with Goldman

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