CSX
CSX Corporation
stock NASDAQ

**TL;DR:** Fund 1 Investments dumped 4.17M FLWS shares on October 22, 2025, then went completely silent on Form 4 filings. But they still hold 5.36M shares (15% of the company). I found SEC filings proving they use **Total Return Swaps (TRS)** on other stocks to gain economic exposure WITHOUT triggering disclosure requirements. The SEC has explicitly ruled this is legal. January 29 earnings + Valentine's Day catalyst window is approaching.
# SECTION 1: THE SMOKING GUN - FUND 1's FORM 4 TIMELINE
I pulled every single Form 4 filing for Fund 1 Investments on FLWS from OpenInsider. Here's what happened:
# January - June 2025: AGGRESSIVE ACCUMULATION
|Filing Date|Trade Date|Action|Shares|Price|Position After|
|:-|:-|:-|:-|:-|:-|
|Jan 15|Jan 10|BUY|\+368,000|$7.40|4,542,364|
|Jan 22|Jan 17|BUY|\+126,301|$8.32|4,668,665|
|Jan 30|Jan 28|BUY|\+486,104|$7.91|5,154,769|
|Feb 4|Jan 31|BUY|\+724,700|$7.91|5,879,469|
|Feb 21|Feb 19|BUY|\+684,000|$8.01|7,084,969|
|Mar 20|Mar 18|BUY|\+201,500|$5.61|8,035,969|
|May 13|May 9|BUY|\+430,863|$4.67|9,118,777|
|Jun 25|Jun 23|BUY|\+47,577|$5.04|**9,527,250**|
**Total accumulated: \~5M shares in 6 months. Peak position: 9.53M shares (14.99% of company)**
# October 22, 2025: THE DUMP
|Filing Date|Trade Date|Action|Shares|Price|Position After|
|:-|:-|:-|:-|:-|:-|
|**Oct 24**|**Oct 22**|**SELL**|**-4,167,813**|**$5.94**|**5,359,437**|
**They sold 44% of their position in ONE DAY for $24.75M**
# November - December 2025: COMPLETE SILENCE
**ZERO Form 4 filings for FLWS since October 22.**
That's 56 days of radio silence on a stock they spent 6 months accumulating. Why?
# SECTION 2: THE HIDDEN MECHANISM - TOTAL RETURN SWAPS
# What is a Total Return Swap?
A Total Return Swap (TRS) is a derivative contract where:
* Party A (hedge fund) pays a fixed/floating rate to Party B (investment bank)
* Party B pays Party A the total return of an underlying asset (stock)
* Party A gets economic exposure WITHOUT owning shares
* **No Form 4 disclosure required**
# SEC Has Explicitly Ruled TRS Doesn't Require Disclosure
From **Wachtell Lipton memo / Harvard Law Forum (2008)** \- CSX Corp v. The Children's Investment Fund:
>
>
>
**Source:** [https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf](https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf)
This is the same loophole Archegos Capital used before it imploded.
# SECTION 3: PROOF FUND 1 USES TOTAL RETURN SWAPS
This isn't speculation. I found SEC filings proving Fund 1 uses TRS on multiple positions:
# EXHIBIT A: Torrid Holdings (CURV) - Form 3, July 1, 2025
From the filing:
>
>
**Source:** SEC Form 3 for CURV, July 1, 2025
# EXHIBIT B: Tile Shop Holdings (TTSH) - Form 4, December 12, 2025
From the filing (3 DAYS AGO):
>
**Source:** SEC Form 4 for TTSH, December 12, 2025
# EXHIBIT C: Genesco (GCO) - Form 4, March 2025
From the filing:
>
**Source:** SEC Form 4 for GCO, March 2025
# SECTION 4: THE FUND 1 PLAYBOOK
Based on their filing history, here's how Fund 1 operates:
|Phase|Action|Visible on Form 4?|
|:-|:-|:-|
|1. Accumulation|Buy shares aggressively over months|✓ YES|
|2. Activist Pressure|Push for CEO changes, board seats|✓ YES (13D)|
|3. Strategic Dump|Sell large block to provide short supply|✓ YES|
|4. TRS Accumulation|Enter swaps for economic exposure|✗ **NO**|
|5. Catalyst|Bank counterparty hedges by buying shares|\-|
|6. Squeeze|Price rises, swaps pay off|\-|
**On FLWS, we're potentially between Phase 3 and Phase 4.**
# SECTION 5: WHY THEY DIDN'T EXIT
If Fund 1 wanted out of FLWS, why would they:
1. **Keep 5.36M shares (15%)** after the dump?
2. **File 13D (activist) instead of 13G (passive)?** \- Activists don't quietly exit
3. **Push for the first non-family CEO in 50 years?** \- Adolfo Villagomez appointed May 2025
4. **Recruit Home Depot executives?** \- New CMO (Melanie Babcock) and CIO (Alex Zelikovsky)
5. **Spend 6 months accumulating** just to abandon the position?
Their activist playbook on BJ's Restaurants, Del Taco, MagnaChip, and Tile Shop shows 12-18 month campaigns. FLWS is mid-cycle.
# SECTION 6: THE CATALYST STACK - JANUARY 2026
|Date|Event|Significance|
|:-|:-|:-|
|Jan 17, 2026|January OPEX|Next options expiration|
|**Jan 29, 2026**|**Q2 FY2026 Earnings**|**HOLIDAY QUARTER - biggest revenue period**|
|Feb 14, 2026|Valentine's Day|Falls on **SATURDAY** (optimal for consumer spending)|
# Supporting Signals:
1. **December 16 Call Volume Spike** \- 4,542 contracts vs 1,771 average = **156% above normal**
2. **Historical Pattern** \- Fund 1 bought 980,405 shares during January 2025 OPEX window
3. **Company Guidance** \- Wholesale sales +24% expected, $50M cost savings program
4. **New Leadership** \- Non-family CEO, Home Depot CMO, AI-focused CIO hired
# SECTION 7: THE ENTITY STRUCTURE
Fund 1 operates through a complex structure designed to obscure positions:
Jonathan Lennon (Managing Member)
│
▼
Fund 1 Investments, LLC (Managing Member)
│
▼
Pleasant Lake Partners LLC (Investment Adviser)
│
▼
PLP Funds Master Fund LP (Holds shares)
│
▼
Pleasant Lake Onshore Feeder Fund LP (Alternate vehicle)
**Location:** Rincon, Puerto Rico (tax advantages) **Millennium Commitment:** $2B gross market value SMA (Bloomberg, March 2025) **Total AUM:** $4B+ including Millennium allocation
# SECTION 8: WHAT THIS MEANS
# The Bull Case:
1. Fund 1 dumped shares to provide supply for shorts/FTD settlement
2. They're now accumulating economic exposure via TRS (invisible to Form 4)
3. When the counterparty bank hedges, they must buy actual shares
4. January earnings + Valentine's Day creates catalyst cover
5. Constrained float (McCann family controls 51% via Class B) amplifies any buying pressure
# The Bear Case:
1. Fund 1 could have genuinely reduced exposure
2. TRS theory is inference, not proven for FLWS specifically
3. Fundamental headwinds: 3 years of losses, $259M debt, declining revenue
4. Borrow rate has normalized (3.17% vs historical negative rebates)
# SECTION 9: EVIDENCE SUMMARY
|Claim|Status|Source|
|:-|:-|:-|
|Fund 1 dumped 4.17M shares Oct 22|**100% PROVEN**|SEC Form 4|
|Fund 1 still holds 5.36M shares (15%)|**100% PROVEN**|SEC Form 4|
|Zero Form 4s since October 22|**100% PROVEN**|OpenInsider|
|Fund 1 uses TRS on other stocks|**100% PROVEN**|CURV, TTSH, GCO filings|
|TRS doesn't require Form 4|**100% PROVEN**|SEC Staff letter (2008)|
|Fund 1 is using TRS on FLWS now|**HIGH PROBABILITY**|Pattern + silence|
|January squeeze will happen|**UNKNOWN**|Market mechanics unpredictable|
# SECTION 10: POSITIONS & DISCLAIMER
**My Position:** 3500 shares @ $4.xx and Dec 19th Options that are probably poopoo now
**Disclaimer:** This is not financial advice. I am not a financial advisor. Do your own due diligence. The TRS theory for FLWS specifically is inference based on documented behavior on other stocks - I cannot prove they have entered TRS agreements on FLWS. Market outcomes are inherently unpredictable.
# SOURCES
1. OpenInsider - Fund 1 Form 4 History: [http://openinsider.com/insider/Fund-1-Investments--LLC/1959730](http://openinsider.com/insider/Fund-1-Investments--LLC/1959730)
2. SEC Staff Letter on TRS (Harvard Law): [https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf](https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf)
3. CURV Form 3 (TRS disclosure): SEC EDGAR, July 1, 2025
4. TTSH Form 4 (TRS exercise): SEC EDGAR, December 12, 2025
5. Pleasant Lake Partners Form ADV: SEC IAPD, March 2025
6. Bloomberg - Millennium Commitment: March 2025
7. Yahoo Finance - FLWS Earnings Calendar
8. [Investing.com](http://Investing.com) \- Fund 1 transaction reports
**Questions? Challenges to my logic? Post below. I'll defend what's proven and acknowledge what's speculation.**

**TL;DR:** Fund 1 Investments dumped 4.17M FLWS shares on October 22, 2025, then went completely silent on Form 4 filings. But they still hold 5.36M shares (15% of the company). I found SEC filings proving they use **Total Return Swaps (TRS)** on other stocks to gain economic exposure WITHOUT triggering disclosure requirements. The SEC has explicitly ruled this is legal. January 29 earnings + Valentine's Day catalyst window is approaching.
# SECTION 1: THE SMOKING GUN - FUND 1's FORM 4 TIMELINE
I pulled every single Form 4 filing for Fund 1 Investments on FLWS from OpenInsider. Here's what happened:
# January - June 2025: AGGRESSIVE ACCUMULATION
|Filing Date|Trade Date|Action|Shares|Price|Position After|
|:-|:-|:-|:-|:-|:-|
|Jan 15|Jan 10|BUY|\+368,000|$7.40|4,542,364|
|Jan 22|Jan 17|BUY|\+126,301|$8.32|4,668,665|
|Jan 30|Jan 28|BUY|\+486,104|$7.91|5,154,769|
|Feb 4|Jan 31|BUY|\+724,700|$7.91|5,879,469|
|Feb 21|Feb 19|BUY|\+684,000|$8.01|7,084,969|
|Mar 20|Mar 18|BUY|\+201,500|$5.61|8,035,969|
|May 13|May 9|BUY|\+430,863|$4.67|9,118,777|
|Jun 25|Jun 23|BUY|\+47,577|$5.04|**9,527,250**|
**Total accumulated: \~5M shares in 6 months. Peak position: 9.53M shares (14.99% of company)**
# October 22, 2025: THE DUMP
|Filing Date|Trade Date|Action|Shares|Price|Position After|
|:-|:-|:-|:-|:-|:-|
|**Oct 24**|**Oct 22**|**SELL**|**-4,167,813**|**$5.94**|**5,359,437**|
**They sold 44% of their position in ONE DAY for $24.75M**
# November - December 2025: COMPLETE SILENCE
**ZERO Form 4 filings for FLWS since October 22.**
That's 56 days of radio silence on a stock they spent 6 months accumulating. Why?
# SECTION 2: THE HIDDEN MECHANISM - TOTAL RETURN SWAPS
# What is a Total Return Swap?
A Total Return Swap (TRS) is a derivative contract where:
* Party A (hedge fund) pays a fixed/floating rate to Party B (investment bank)
* Party B pays Party A the total return of an underlying asset (stock)
* Party A gets economic exposure WITHOUT owning shares
* **No Form 4 disclosure required**
# SEC Has Explicitly Ruled TRS Doesn't Require Disclosure
From **Wachtell Lipton memo / Harvard Law Forum (2008)** \- CSX Corp v. The Children's Investment Fund:
>
>
>
**Source:** [https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf](https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf)
This is the same loophole Archegos Capital used before it imploded.
# SECTION 3: PROOF FUND 1 USES TOTAL RETURN SWAPS
This isn't speculation. I found SEC filings proving Fund 1 uses TRS on multiple positions:
# EXHIBIT A: Torrid Holdings (CURV) - Form 3, July 1, 2025
From the filing:
>
>
**Source:** SEC Form 3 for CURV, July 1, 2025
# EXHIBIT B: Tile Shop Holdings (TTSH) - Form 4, December 12, 2025
From the filing (3 DAYS AGO):
>
**Source:** SEC Form 4 for TTSH, December 12, 2025
# EXHIBIT C: Genesco (GCO) - Form 4, March 2025
From the filing:
>
**Source:** SEC Form 4 for GCO, March 2025
# SECTION 4: THE FUND 1 PLAYBOOK
Based on their filing history, here's how Fund 1 operates:
|Phase|Action|Visible on Form 4?|
|:-|:-|:-|
|1. Accumulation|Buy shares aggressively over months|✓ YES|
|2. Activist Pressure|Push for CEO changes, board seats|✓ YES (13D)|
|3. Strategic Dump|Sell large block to provide short supply|✓ YES|
|4. TRS Accumulation|Enter swaps for economic exposure|✗ **NO**|
|5. Catalyst|Bank counterparty hedges by buying shares|\-|
|6. Squeeze|Price rises, swaps pay off|\-|
**On FLWS, we're potentially between Phase 3 and Phase 4.**
# SECTION 5: WHY THEY DIDN'T EXIT
If Fund 1 wanted out of FLWS, why would they:
1. **Keep 5.36M shares (15%)** after the dump?
2. **File 13D (activist) instead of 13G (passive)?** \- Activists don't quietly exit
3. **Push for the first non-family CEO in 50 years?** \- Adolfo Villagomez appointed May 2025
4. **Recruit Home Depot executives?** \- New CMO (Melanie Babcock) and CIO (Alex Zelikovsky)
5. **Spend 6 months accumulating** just to abandon the position?
Their activist playbook on BJ's Restaurants, Del Taco, MagnaChip, and Tile Shop shows 12-18 month campaigns. FLWS is mid-cycle.
# SECTION 6: THE CATALYST STACK - JANUARY 2026
|Date|Event|Significance|
|:-|:-|:-|
|Jan 17, 2026|January OPEX|Next options expiration|
|**Jan 29, 2026**|**Q2 FY2026 Earnings**|**HOLIDAY QUARTER - biggest revenue period**|
|Feb 14, 2026|Valentine's Day|Falls on **SATURDAY** (optimal for consumer spending)|
# Supporting Signals:
1. **December 16 Call Volume Spike** \- 4,542 contracts vs 1,771 average = **156% above normal**
2. **Historical Pattern** \- Fund 1 bought 980,405 shares during January 2025 OPEX window
3. **Company Guidance** \- Wholesale sales +24% expected, $50M cost savings program
4. **New Leadership** \- Non-family CEO, Home Depot CMO, AI-focused CIO hired
# SECTION 7: THE ENTITY STRUCTURE
Fund 1 operates through a complex structure designed to obscure positions:
Jonathan Lennon (Managing Member)
│
▼
Fund 1 Investments, LLC (Managing Member)
│
▼
Pleasant Lake Partners LLC (Investment Adviser)
│
▼
PLP Funds Master Fund LP (Holds shares)
│
▼
Pleasant Lake Onshore Feeder Fund LP (Alternate vehicle)
**Location:** Rincon, Puerto Rico (tax advantages) **Millennium Commitment:** $2B gross market value SMA (Bloomberg, March 2025) **Total AUM:** $4B+ including Millennium allocation
# SECTION 8: WHAT THIS MEANS
# The Bull Case:
1. Fund 1 dumped shares to provide supply for shorts/FTD settlement
2. They're now accumulating economic exposure via TRS (invisible to Form 4)
3. When the counterparty bank hedges, they must buy actual shares
4. January earnings + Valentine's Day creates catalyst cover
5. Constrained float (McCann family controls 51% via Class B) amplifies any buying pressure
# The Bear Case:
1. Fund 1 could have genuinely reduced exposure
2. TRS theory is inference, not proven for FLWS specifically
3. Fundamental headwinds: 3 years of losses, $259M debt, declining revenue
4. Borrow rate has normalized (3.17% vs historical negative rebates)
# SECTION 9: EVIDENCE SUMMARY
|Claim|Status|Source|
|:-|:-|:-|
|Fund 1 dumped 4.17M shares Oct 22|**100% PROVEN**|SEC Form 4|
|Fund 1 still holds 5.36M shares (15%)|**100% PROVEN**|SEC Form 4|
|Zero Form 4s since October 22|**100% PROVEN**|OpenInsider|
|Fund 1 uses TRS on other stocks|**100% PROVEN**|CURV, TTSH, GCO filings|
|TRS doesn't require Form 4|**100% PROVEN**|SEC Staff letter (2008)|
|Fund 1 is using TRS on FLWS now|**HIGH PROBABILITY**|Pattern + silence|
|January squeeze will happen|**UNKNOWN**|Market mechanics unpredictable|
# SECTION 10: POSITIONS & DISCLAIMER
**My Position:** 3500 shares @ $4.xx and Dec 19th Options that are probably poopoo now
**Disclaimer:** This is not financial advice. I am not a financial advisor. Do your own due diligence. The TRS theory for FLWS specifically is inference based on documented behavior on other stocks - I cannot prove they have entered TRS agreements on FLWS. Market outcomes are inherently unpredictable.
# SOURCES
1. OpenInsider - Fund 1 Form 4 History: [http://openinsider.com/insider/Fund-1-Investments--LLC/1959730](http://openinsider.com/insider/Fund-1-Investments--LLC/1959730)
2. SEC Staff Letter on TRS (Harvard Law): [https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf](https://corpgov.law.harvard.edu/wp-content/uploads/2008/06/sec-staff-advises-that-13d-disclosure-requirements-do-not-extend-to-total-return-equity-swaps.pdf)
3. CURV Form 3 (TRS disclosure): SEC EDGAR, July 1, 2025
4. TTSH Form 4 (TRS exercise): SEC EDGAR, December 12, 2025
5. Pleasant Lake Partners Form ADV: SEC IAPD, March 2025
6. Bloomberg - Millennium Commitment: March 2025
7. Yahoo Finance - FLWS Earnings Calendar
8. [Investing.com](http://Investing.com) \- Fund 1 transaction reports
**Questions? Challenges to my logic? Post below. I'll defend what's proven and acknowledge what's speculation.**