What Happened?
Shares of e-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ:FLWS) fell 13.5% in the afternoon session after a major shareholder, Fund 1 Investments, LLC, disclosed the sale of more than four million shares.
The sale, valued at nearly $25 million, involved 4,167,833 shares. A large transaction by a ten percent owner can raise concerns among investors about a company's future prospects. The news arrived as the company faced several challenges. Over the previous two years, sales had fallen by 8.6% annually, suggesting consumer trends were not in its favor. The company also showed poor returns on its investments and had an unfavorable cash position, which could lead to actions that might reduce the value of existing shares.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy 1-800-FLOWERS? Access our full analysis report here.
What Is The Market Telling Us
1-800-FLOWERS’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. But moves this big are rare even for 1-800-FLOWERS and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 6.9% on the news that the stock continued to see high trading volume amid ongoing interest from speculative investors targeting the company due to its heavily shorted status. The move came on significant trading volume that was nearly 28% above its 50-day average. This activity followed a volatile previous trading session where the stock was a trending topic on social media platforms, with user messages about the company surging. The high level of interest appeared linked to the stock's large short position, as reports indicated more than half of its publicly traded shares had been borrowed by investors betting the price would fall. Such heavily shorted stocks often attracted speculative traders who bought shares in an attempt to drive the price up.
1-800-FLOWERS is down 49.7% since the beginning of the year, and at $3.93 per share, it is trading 56.8% below its 52-week high of $9.09 from February 2025. Investors who bought $1,000 worth of 1-800-FLOWERS’s shares 5 years ago would now be looking at an investment worth $151.98.
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