Form 4: Fund 1 Investments, LLC Increases Stake in Tile Shop Holdings, Inc.

Fund 1 Investments, LLC reports increased holdings in Tile Shop Holdings, Inc. through common stock purchases and cash-settled total return swaps.

Summary

• Fund 1 Investments, LLC, along with Pleasant Lake Partners LLC and PLP Funds Master Fund LP, filed a Form 4 detailing changes in beneficial ownership of Tile Shop Holdings, Inc. (TTSH).
• On May 19, 2025, Fund 1 Investments, LLC acquired 5,547 shares of common stock at a price of $5.9642 per share.
• The reporting persons also entered into cash-settled total return swap arrangements, providing economic exposure to 10,000 and 15,000 notional shares of common stock at prices of $6.1196 and $6.1435 per share, respectively.
• As of the report, Fund 1 Investments, LLC beneficially owns 11,820,475 shares of common stock indirectly through PLP Funds Master Fund LP and another private investment vehicle.
• Additionally, 1,002,207 shares are held for the account of an unaffiliated private fund for which PLP serves as investment advisor.
• The swap agreements' expiration dates will automatically extend for successive 12-month periods unless written notice is provided.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The increased investment suggests confidence, but the use of swaps introduces some complexity and potential risk.

Positives

• Increased investment in Tile Shop Holdings, Inc. signals confidence from Fund 1 Investments, LLC.
• The use of cash-settled total return swaps allows for economic exposure without direct ownership, providing flexibility.

Risks

• The cash-settled total return swaps expose the reporting persons to the economic risks associated with the underlying shares without the benefits of ownership, such as voting rights.
• The value of the swaps is tied to the price of TTSH common stock, making them susceptible to market fluctuations.

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 days prior to any subsequent extension, not to so extend the expiration date.

Industry Context

Form 4 filings are standard practice for reporting changes in beneficial ownership by company insiders and major shareholders, providing transparency to the market.

Comparison to Industry Standards

• Comparable companies in the home improvement retail sector, such as Home Depot (HD) and Lowe's (LOW), also have insider transaction reporting requirements.
• Monitoring insider activity can provide insights into management's confidence in the company's prospects, although it's not a definitive indicator of future performance.

Stakeholder Impact

• Shareholders may view the increased investment positively, potentially leading to increased confidence in the company.
• The transactions have no immediate impact on employees, customers, suppliers, or creditors.

Key Dates

Keywords

Tile Shop Holdings, TTSH, Fund 1 Investments, Beneficial Ownership, Form 4, Cash-Settled Total Return Swap, Investment, Shares