Form 4: Fund 1 Investments, LLC Increases Stake in 1-800 FLOWERS.COM INC (FLWS) Through Stock Purchases and Cash-Settled Swaps

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

Summary

• On February 13, 2025, Fund 1 Investments, LLC purchased 15,500 shares of Class A Common Stock at a price of $8.4962 per share.
• On February 14, 2025, an additional 1,000 shares were purchased at $8.663 per share.
• Following these transactions, the reporting persons beneficially own 6,400,969 shares indirectly.
• The reporting persons also entered into cash-settled total return swaps representing economic exposure to 3,671,566 notional shares of Class A Common Stock.
• The swaps expire on June 18, 2026, but can be extended.

Sentiment

Score: 6

Explanation: The document indicates increased investment, which is generally positive, but the use of swaps introduces complexity and potential risks. The sentiment is neutral to slightly positive.

Positives

• Increased investment by Fund 1 Investments, LLC may signal confidence in 1-800 FLOWERS.COM INC.
• The use of cash-settled swaps allows for economic exposure without direct ownership, potentially offering flexibility.

Risks

• The cash-settled swaps expose the reporting persons to the economic risks associated with the underlying shares without the benefits of voting rights or direct control.
• The value of the swaps is dependent on the performance of 1-800 FLOWERS.COM INC's stock.

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.

Industry Context

Investment firms frequently use derivatives like cash-settled swaps to gain economic exposure to companies without directly owning the shares, which can be part of a broader investment strategy or hedging activity.

Comparison to Industry Standards

• Hedge funds and investment firms commonly use total return swaps to gain exposure to assets without direct ownership, similar to strategies employed by firms like Pershing Square or Elliott Management.
• The level of beneficial ownership and swap positions are within the range of activities seen by activist investors who may seek to influence company strategy.

Stakeholder Impact

• Increased investment could positively influence shareholder confidence.
• The transactions may have a limited direct impact on employees, customers, suppliers, or creditors.

Key Dates