Form 4: Fund 1 Investments, LLC Increases Stake in 1-800 FLOWERS.COM Inc.

Fund 1 Investments, LLC, along with related entities, increased its holdings in 1-800 FLOWERS.COM Inc. through open market purchases and cash-settled total return swaps.

Summary

• Fund 1 Investments, LLC, PLP Funds Master Fund LP, and Pleasant Lake Partners LLC (collectively, the 'Reporting Persons') have filed a Form 4 detailing changes in their beneficial ownership of 1-800 FLOWERS.COM Inc. (FLWS) stock.
• On April 7, 2025, the Reporting Persons purchased 2,500 shares of Class A Common Stock at a price of $5.7874 per share.
• On April 9, 2025, they purchased an additional 30,000 shares of Class A Common Stock at $5.71 per share.
• The Reporting Persons also entered into cash-settled total return swaps, providing economic exposure to 3,791,566 notional shares of FLWS stock.
• As of April 9, 2025, the Reporting Persons beneficially own 8,232,969 shares of Class A Common Stock.
• The expiration date of the Swap Agreements will be automatically extended for successive 12 month periods unless one party provides written notice to the other party, at least 30 calendar days prior to the first extension and at least 15 calendar days prior to any subsequent extension, not to so extend the expiration date.

Sentiment

Score: 7

Explanation: The increased investment suggests a positive outlook from Fund 1 Investments, but the use of swaps introduces some complexity and potential risk.

Positives

• Increased investment by Fund 1 Investments, LLC suggests confidence in 1-800 FLOWERS.COM Inc.'s future prospects.
• The use of cash-settled total return swaps allows the Reporting Persons to gain economic exposure without directly owning the shares, potentially offering flexibility.

Risks

• The cash-settled total return swaps expose the Reporting Persons to counterparty risk with the unaffiliated third-party financial institution.
• The value of the swaps is tied to the performance of FLWS stock, creating potential for losses if the stock price declines.

Future Outlook

The expiration date of the Swap Agreements will be automatically extended for successive 12 month periods unless one party provides written notice to the other party, at least 30 calendar days prior to the first extension and at least 15 calendar days prior to any subsequent extension, not to so extend the expiration date.

Industry Context

Hedge funds and investment firms frequently use derivatives like cash-settled swaps to gain exposure to companies without direct ownership, which can be part of broader hedging or investment strategies.

Comparison to Industry Standards

• It's common for investment firms like Fund 1 Investments to utilize strategies involving both direct stock purchases and derivative instruments.
• Cash-settled swaps are frequently used by hedge funds to gain economic exposure to a stock without the obligations of direct ownership, such as voting rights.
• The size of the position, representing a significant percentage of the company's outstanding shares, suggests a substantial investment and potentially a long-term view.

Stakeholder Impact

• The increased investment could be viewed positively by shareholders, potentially leading to increased confidence in the company.
• The transactions do not appear to have a direct impact on employees, customers, suppliers, or creditors.

Key Dates

Keywords

1-800 FLOWERS.COM, FLWS, Fund 1 Investments, PLP Funds Master Fund, Pleasant Lake Partners, Beneficial Ownership, Form 4, Cash-Settled Total Return Swap, Investment