F9 Investments is the LLC owned (there's only one person that owns it mind you) by the founder of Lumber Liquidators.
Other than holding a bunch of stock in LL, he is no longer involved with the company. He's not on the payroll. He stays busy with his other company that he owns under his LLC, Kitchen Cabinets to Go.
So imagine if you or I could do this....
You while away the hot, lazy hazy days of August in TN buying up 1.3 million shares of a company you founded but are technically no longer a part of.... for about $7.88/share on the open market. Then you pick up 5000 calls (good for 500,000 shares) for which you literally pay pennies. Pennies.
On September 3rd, you file with the SEC and make a press release that you are considering taking Lumber Liquidators private and merging it with your Kitchen Cabinet Company.
Over the next 5 trading sessions, the stock goes up 50% almost. You bail out on September 12th.
All those shares, all those calls... dumped on the open market. Bought by retail players who were suckered in by the press releases and the subsequent hype by various websites pumping the idea of a $17+ buyout and CNBC flagging the call volume in unusual options activity!
You pocket millions of dollars as you sell to the "Elite Traders" of the world who trade $10K accounts.
Nice payday.
The very next day... September 13th... you change your mind.
You file with the SEC and make another press release. You decide "these actions are now less prudent at these elevated levels."
The stock tanks.
....3 trading days later its back to $9.
From the 13D filed 9/12/19:
(c) In the last 60 days, F9 Investments, LLC acquired 1,346,240 shares of Common Stock between trade dates August 7 to August 16, 2019 with an average price of $7.88 per share. On September 4, 2019, previously purchased 5000 Sept 20, 2019 $10 Strike Calls to purchase 500,000 shares of Common Stock became exercisable. From trade date September 11 through September 12, 2019, the Reporting Persons sold a total of 1,250,472 shares of Common Stock with an average price of $11.68 per share, and 5000 Sept 20, 2019 $10 Strike Call Options to Purchase 500,000 shares at an average price of $2.20 per contract making the total of 1,750,472 beneficially owned shares sold. In the last 60 days, all shares or options were acquired or sold on the open market. 366,127 shares of Common Stock were held previously as a long-term investment.
....Must be nice to be able to get away with this sh*t. That's all I can say.
