Form 4: Fund 1 Investments, LLC Reports Transactions in Tile Shop Holdings, Inc. via Cash-Settled Total Return Swaps

Fund 1 Investments, LLC, along with related entities, discloses transactions involving cash-settled total return swaps linked to Tile Shop Holdings, Inc. common stock.

Summary

• Fund 1 Investments, LLC, 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).
• The reporting persons entered into cash-settled total return swap arrangements with an unaffiliated third party financial institution.
• These swaps provide economic exposure to a total of 120,000 notional shares of TTSH common stock.
• The swaps do not provide the power to vote or direct the voting or dispose of or direct the disposition of the shares of common stock that are the subject of the swap agreements.
• 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.
• The transactions occurred between April 10, 2025 and April 14, 2025.
• The prices per share for the swaps ranged from $5.628 to $5.8945.
• Following the reported transactions, the reporting persons beneficially own 232,500 shares indirectly.

Sentiment

Score: 5

Explanation: The document is a standard regulatory filing detailing transactions. It doesn't inherently convey positive or negative sentiment.

Industry Context

The use of cash-settled total return swaps is a common strategy employed by investment funds to gain economic exposure to a company's stock without directly owning the shares or having voting rights.

Comparison to Industry Standards

• Hedge funds and investment firms frequently use total return swaps to manage their exposure to various assets, including equities.
• The specific terms and conditions of these swaps, such as the notional amount, pricing, and expiration dates, are typically negotiated privately between the parties involved.
• Comparable companies in the retail or home improvement sectors might see similar filings from their major shareholders or investment firms utilizing similar strategies.

Stakeholder Impact

• The transactions may have a minor impact on shareholders as they reflect changes in the economic exposure of major investors.
• The use of swaps rather than direct ownership means there is no change in the number of outstanding shares or voting rights.

Key Dates

Keywords

Form 4, beneficial ownership, cash-settled total return swap, TILE SHOP HOLDINGS, TTSH, Fund 1 Investments, Pleasant Lake Partners, PLP Funds Master Fund