FLWS

1-800-Flowers.Com($FLWS): Major Shareholder Pours $28 Million Into Stock Despite 40% Plunge - Long-Term Value Play or Warning Sign?

04/28/2025 20:47

In recent months, 1-800-Flowers.Com Inc ($FLWS) has shown a persistent stock price decline, yet major shareholder Fund 1 Investments, LLC has been executing substantial purchases from January through April 2025, creating a noteworthy insider trading pattern worthy of investor attention. $FLWS, an online retailer specializing in flowers and gifts, has experienced significant volatility over the past six months. The stock, which traded at $9.09 in mid-February 2025, has fallen approximately 40% to around $5.50 by late April. Market turmoil following President Trump's tariff announcements in early April 2025 placed additional downward pressure on the share price. Despite this declining trend, Fund 1 Investments, LLC has consistently purchased shares from January 10, 2025, through April 28, 2025. According to insider trading data, the investment firm acquired 368,000 shares (approximately $2.72 million) between January 10 and January 15, followed by over 1.15 million additional shares (roughly $9 million) from late January through early February. The buying momentum intensified throughout February and March with hundreds of thousands of additional shares purchased. Particularly notable is Fund 1 Investments' continued buying even as the stock price sharply declined. After mid-March, when the share price fell below $6, the firm added more than 470,000 shares, and during the broader market collapse in early April, they purchased an additional 130,000+ shares. By April 28, the investment firm had acquired more than 3.6 million shares totaling approximately $28 million. In contrast, the company's CIO, Leap Arnold P, sold 3,000 shares (approximately $22,110) on November 19, 2024. However, this sale is relatively minor compared to the major shareholder's substantial purchases. $FLWS has faced financial challenges in recent quarters. Results announced on January 30, 2025, showed adjusted earnings of $1.00 per share for the quarter ending December 31, down from $1.27 in the previous year, with revenue declining 5.7% to $775.49 million. The quarter ending September 30, 2024, reported a loss of 53 cents per share, with revenue down 10%. Analysts currently maintain a 'buy' rating on $FLWS with a median 12-month price target of $11.00, significantly higher than the current trading price. This aligns with the major shareholder's persistent buying activity. A particularly interesting aspect is Fund 1 Investments' disclosure of cash-settled total return swaps in their April 10 and April 14 filings. These contracts provide economic exposure to approximately 3.83 million notional shares without voting power or the ability to direct disposition. Such complex derivative arrangements may represent a strategy to gain additional economic benefits while reducing regulatory burdens associated with direct share ownership. The U.S. market experienced significant turbulence in April 2025, with the S&P 500 falling more than 17% from its record high following President Trump's tariff announcements. Despite a market rebound after the April 9 announcement of a temporary tariff suspension, $FLWS shares remain under pressure. Fund 1 Investments' continued buying amid this volatility may signal a long-term value investment perspective. $FLWS operates a highly seasonal business model, with revenues concentrated around specific occasions such as Valentine's Day, Mother's Day, and the year-end holidays. This seasonality, combined with recent reductions in consumer spending, may impact short-term performance, but the major shareholder's consistent purchasing suggests confidence in the company's long-term growth potential. Looking ahead, $FLWS faces important business periods with Mother's Day in May and the summer wedding season. Key variables that will influence performance include potential recovery in consumer spending patterns and stabilization of logistics and raw material costs. The timing of any stock price recovery, despite the major shareholder's persistent buying, will largely depend on these factors.

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