Form 4: Torrid Holdings 10% Owner Increases Stake with Significant Share Purchases and Swap Agreements

Fund 1 Investments, LLC, a 10% owner and director of Torrid Holdings Inc., has increased its beneficial ownership through the acquisition of 8,500 common shares and entering into new cash-settled total return swap agreements for 25,000 notional shares.

Summary

• Fund 1 Investments, LLC, along with related entities PLP Funds Master Fund LP and Pleasant Lake Partners LLC, reported an increase in their beneficial ownership of Torrid Holdings Inc. common stock.
• On June 27, 2025, 5,000 shares of common stock were acquired at a price of $3.1945 per share.
• On the same date, an additional 3,500 shares of common stock were acquired at a price of $3.216 per share.
• Following these transactions, the total indirect beneficial ownership of non-derivative common stock stands at 10,433,112 shares.
• The reporting persons also entered into new cash-settled total return swap agreements on June 27, 2025, providing economic exposure to 25,000 notional shares of common stock at a price of $3.276 per notional share.
• The total beneficial ownership of derivative securities (cash-settled total return swaps) following this transaction is 3,805,255 notional shares.
• These swap agreements have expiration dates ranging from March 2, 2026, to November 1, 2027, with provisions for automatic 12-month extensions.

Sentiment

Score: 8

Explanation: The acquisition of additional shares and new swap agreements by a significant insider (10% owner and director) indicates strong confidence in the company's future performance and valuation, which is a highly positive signal for investors.

Positives

• A significant 10% owner and director, Fund 1 Investments, LLC, increased its stake in Torrid Holdings Inc. by acquiring 8,500 common shares, signaling confidence in the company's future.
• The acquisition of 25,000 notional shares through cash-settled total return swaps further demonstrates a bullish economic interest in Torrid Holdings Inc.
• The average purchase price for the common shares was approximately $3.20 per share, indicating a specific valuation point at which the insider found the stock attractive.

Risks

• The cash-settled total return swaps provide economic exposure but do not grant voting or disposition power over the underlying shares, limiting direct influence on corporate governance for those specific shares.
• The reporting persons disclaim beneficial ownership of the shares underlying the swaps except to the extent of their pecuniary interest, which could imply a more limited long-term commitment compared to direct share ownership.

Future Outlook

The filing indicates a continued economic interest in Torrid Holdings Inc. through the acquisition of additional shares and the establishment of new swap agreements with expiration dates extending into 2026 and 2027, suggesting a long-term positive view by the reporting persons.

Management Comments

• Benjamin C. Cable, Chief Operating Officer of Fund 1 Investments, LLC, signed the filing on behalf of the reporting persons.

Industry Context

The insider buying activity by a significant shareholder and director in Torrid Holdings Inc. suggests a belief in the company's potential within the retail sector, particularly in the plus-size apparel market. Such actions can be interpreted as a positive signal, especially in a dynamic retail environment where consumer spending patterns and market trends are closely watched.

Related Party Transactions

• Fund 1 Investments, LLC serves as managing member of Pleasant Lake Partners LLC, which serves as investment adviser to PLP Funds Master Fund LP.
• Jonathan Lennon serves as managing member of Fund 1 Investments, LLC.
• The reporting persons disclaim beneficial ownership of the shares reported except to the extent of their pecuniary interest, clarifying the nature of their indirect holdings.

Stakeholder Impact

• Shareholders: The insider buying activity may instill confidence among existing shareholders and attract new investors, potentially leading to increased demand for the stock.
• Management: The increased stake by a significant owner could align interests between management and this key shareholder, potentially influencing strategic decisions.

Next Steps

• The swap agreements include provisions for automatic 12-month extensions unless one party provides written notice not to extend, indicating potential future decisions regarding these derivative positions.

Key Dates

Recommendation

Keywords

Torrid Holdings Inc., CURV, SEC Form 4, Insider Buying, Share Acquisition, Total Return Swap, Beneficial Ownership, Fund 1 Investments, PLP Funds Master Fund, Pleasant Lake Partners, Director, 10% Owner, Equity Investment