FLWS

As 1-800-Flowers.com ($FLWS) Stock Plunges, Major Shareholder Deploys $30 Million Buying Spree Over Three Months - Value Signal or Warning Sign?

03/28/2025 21:23

1-800-Flowers.com Inc ($FLWS) has seen its stock price decline significantly over the past three months, yet the company's major shareholder, Fund 1 Investments, LLC, has been aggressively purchasing shares, drawing investor attention. This small-cap company (market cap of approximately $520 million), which specializes in online flower and gift sales, has experienced considerable stock volatility over the past six months. After reaching a peak of $11.00 in mid-July 2024, the stock followed a downward trend before briefly recovering to around $8.85 in mid-January 2025, only to continue declining thereafter, recently trading below $6.00. Amid this stock decline, Fund 1 Investments, LLC has demonstrated remarkable buying activity since January 2025. What's particularly noteworthy is that this major shareholder has increased its purchasing volume as the stock price has fallen. From January 10 to March 28, 2025, Fund 1 Investments consistently bought $FLWS shares almost daily, with total purchases amounting to approximately $30 million. This concentrated buying pattern occurred at varying price points: in January at $7.18-$8.85 per share, in February at $7.46-$8.77, and in March at even lower levels of $5.51-$6.62. Fund 1 particularly intensified its buying activity in March as the stock dipped below $6. In contrast, the company's CIO, Leap Arnold P, sold 3,000 shares at $7.37 per share on November 19, 2024. This creates an interesting divergence between executive selling and major shareholder accumulation. The aggressive buying stance of the major shareholder stands in contrast to the company's recent financial performance. 1-800-Flowers.com has reported consecutively disappointing quarterly results. In its December 2024 quarter announced on January 30, 2025, the company reported earnings of $1.00 per share, down from $1.27 in the same quarter the previous year. Revenue also decreased by 5.7% to $775.49 million, falling short of analyst expectations of $801.64 million. For the entire fiscal year 2024, total revenue declined to $1.83 billion from $2.02 billion the previous year. Despite this revenue decline, the company maintained an adjusted net income of $11.6 million and adjusted EBITDA of $93.1 million. A significant point of interest is $FLWS's high short interest ratio of 20.08%, indicating that a substantial number of market participants are betting on further stock declines. However, Fund 1 Investments' aggressive purchasing clearly contradicts this market sentiment. 1-800-Flowers.com is a leading online retailer of flowers and gifts in the United States, operating several business segments including Consumer Floral and Gifts, BloomNet, and Gourmet Foods and Gift Baskets. The company's business exhibits strong seasonality, with sales concentrated around major occasions and holidays such as Valentine's Day, Mother's Day, and Christmas. In recent years, the company has attempted to diversify its product lines with gift baskets and food gifts to reduce seasonal volatility. However, recent inflation and consumer spending constraints have affected the gift and luxury market, contributing to the company's sales decline. Analysts have mixed outlooks on $FLWS. The average price target is $9.75, significantly higher than the current price, with three analysts maintaining buy ratings and three holding. This indicates a certain level of confidence in the company's long-term value within the market. Fund 1 Investments' large-scale purchases have been made primarily through PLP Funds Master Fund LP, and according to disclosure documents, they disclaim beneficial ownership except to the extent of their pecuniary interest. This pattern is typical of hedge funds or investment institutions focusing on undervalued companies. Looking ahead, key performance indicators for 1-800-Flowers.com will be its sales performance during the upcoming Mother's Day and the 2025 summer wedding season. Additionally, the company's ability to improve operational efficiency and maintain margins in the continuing uncertain economic environment will be crucial metrics. Despite the stock decline and short-selling pressure, the major shareholder's consistent purchasing could be interpreted by some investors as a signal that $FLWS is currently undervalued. However, the declining sales trend and intensified competition within the industry remain significant risk factors.

You can receive notifications when news is published.