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Instead of needles, a malaria vaccine trial used mosquitos as “flying syringes,” exposing subjects to insects carrying genetically modified parasites. Science!

In today’s email:

  • Baloney: The fraudulent case of the $100m deli.
  • Chart: AirPods, and the future of Apple.
  • Spaces: An app for queer connections.
  • Around the Web: An annoying museum, phone photo tips, collaborative storytelling, and more cool internet finds.

🎧 On the go? Listen to today’s 10-minute podcast to hear Jacob and Rob discuss Apple’s insane AirPods business, the wild story of this $100m deli, DALL-E’s big news, and more.

The big idea
Deli listing on Google Maps

Zachary Crockett

The long, strange saga of the $100m deli

Your Hometown Deli was a seemingly modest sandwich shop with a “mean cheesesteak.”

Then, a memo from hedge fund manager David Einhorn exposed the deli as the sole holding of Hometown International, a public shell company valued at $100m+.

This week, the Justice Department charged three men involved with the company of securities fraud, per The New York Times.

So what the heck happened?

Back in 2014, this saga started with a real deli. But unlike most sandwich shops, according to prosecutors, the owners were convinced by a friend with a finance background into incorporating the deli as a subsidiary under the umbrella of Hometown International.

Instead of trying to make New Jersey’s best pastrami, this friend allegedly sought to use Your Hometown Deli as a vehicle for an obscure financial transaction called a reverse merger.

A reverse merger is when a private company goes public by acquiring an already public shell company.

Hometown International was going to be that public shell

In 2019, the company went public on the OTC Markets, a stock market like the Nasdaq and NYSE but with crucial differences.

  • First, transactions take place between two parties rather than a centralized exchange, making it easier to manipulate share prices.
  • Second, the OTC doesn’t delist companies if they break rules.

Prosecutors allege this lax environment allowed Hometown’s shareholders to manipulate its share price. So, despite the corporation owning just one deli with ~$40k in annual income, its stock soared 939% from $1.25 per share in 2019 to $12.99 in 2021, just before Einhorn’s heavily publicized callout.

So what now?

Hometown International completed a reverse merger with Makamer, a private bioplastics startup, in March. But given the indictment, its leaders may end up serving prison time instead of cashing in.

The worst part: The deli closed permanently after the Makamer merger, leaving locals with one less option for quality hoagies.

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TRENDING
eyeball wearing a hat

Neat! “WTF is happening in Ohio” is just the latest in a long line of popular internet memes depicting Ohio as a “horror-filled wasteland.”

SNIPPETS

Google released cool new ways to search, including a multisearch feature and an immersive view in Maps.

Major League Pickleball scored new investors, including LeBron James, as it plans to expand from 12 to 16 teams.

‌Apple appears to be gearing up to launch Apple Music‌ Classical, the supposed name of its standalone classical music app.

Instagram is testing a feature that lets you leave a text “note” for followers lasting 24 hours.

OpenAI, creator of the mind-boggling text-to-image program DALL-E, removed the program’s waitlist so anyone can now use it.

A YouTuber who posted about modifying a Tesla with an old diesel engine said the EPA has asked him to stop.

Amazon announced a swath of updates to its hardware lines, including a Kindle that you can write on.

Hey Dude, a shoe brand acquired by Crocs this year for ~$2.5B, saw its Q2 revenue jump 96% YoY and is on pace to hit $1B in 2022.

That’s nice: AT&T is waiving overage fees for talk, text, and data through October for customers affected by Hurricane Ian.

Marketing gold: Sequoia Capital CMO Sumaiya Balbale joined Kip and Kieran on Marketing Against The Grain to talk startup marketing. Listen to learn about the ideal marketing strategy for each stage of startup growth.

Chart
1 in 4 US teens own AirPods

Singdhi Sokpo

What AirPods say about the future of Apple

Remember when headphones came free with iPhones?

Over time, the company replaced that perk with must-have AirPods, responsible for ~$25B in 2021 revenue, per Bloomberg.

Understandably, Apple’s buds work better with Apple products than any others. It’s a practice that some, like AirTag competitor Tile and Google (regarding iMessage), consider abusive market power.

It also says a lot…

… about where Apple’s headed. The most “original” product of the Cook era may be the upcoming Apple Reality headset. (“AR,” get it?)

  • Demand for such a product isn’t much, but neither was demand for AirPods at launch, necessarily. Cue this “Conan” spoof from 2016.
  • It also won’t be the market’s only offering. Meta has already sold ~15m Quest 2 headsets, for instance.

Apple’s headset, however, will be the one that works best with your iPhone, AirPods, and $10/mo. Apple Music account. That setup could make it a home run.

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Safe Spaces
Spaces app

Spaces, a safe platform for queer connections

Spaces is a free app for queer people to connect. Unlike dating apps, it functions as a giant chatroom for the entire LGBTQ+ spectrum.

Its parent company, Hornet, was founded in 2011 as a dating app for queer men and is now a social network with 35m users.

Why it matters

Many marginalized communities face harassment on social media platforms, the largest of which have been criticized for their failure to stop it.

“Those platforms subsist on spurring hatred and trolling,” Hornet/Spaces executive editor Stephan Horbelt told The Hustle. “Spaces is a place where people go to talk about the things they want to lift up and celebrate.”

Spaces launched…

… on March 1 for iOS and is coming soon to Android. It’s raised $899k+ on Wefunder, and already has ~1.5k individual “spaces” on the platform:

  • Anyone can make a public or private space
  • They function like group chats with threaded conversations
  • Many are for specific interests (e.g., gaming, movies, fitness)
  • Others are location-based or for various segments of the community (e.g., bi men, nonbinary people, transgender women)

Horbelt said the first space to get really popular was for Black, queer, and transgender weightlifters.

“The value proposition of our app,” Horbelt said, “is all about queer people being able to come to a digital platform where they can be their full selves.”

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AROUND THE WEB

🖥️ On this day: In 1983, Microsoft released Microsoft Word 1.0, its first software application. A free demo was included, on floppy disk, in PCWorld magazine.

✍️ Cure boredom: Treefingers is a collaborative storytelling website where users add their own chapters to keep tales going.

😑 Haha: Zendesk’s virtual Museum of Annoying Experiences.

📱 How to: Take great photos on Android and iOS phones using their various features.

👂 Aww: Steve, what did he just say?

Meme
AirPods meme

The cord can save lives. (Source: Twitter)

How did you like today’s email?
Today’s email was brought to you by Jacob Cohen, Juliet Bennett Rylah, and Rob Litterst.
Editing by: Mark “Cheesesteak Billionaire” Dent.

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