Form 4: Atlassian Co-Founder Scott Farquhar Converts Class B Shares for Planned Sales Under 10b5-1 Plan

Atlassian Director and 10% Owner Scott Farquhar converted 490,560 shares of Class B Common Stock into Class A Common Stock on July 1, 2025, in preparation for sales under a pre-arranged 10b5-1 trading plan.

Summary

• Scott Farquhar, a Director and 10% Owner of Atlassian Corp (TEAM), reported a change in beneficial ownership.
• On July 1, 2025, Farquhar converted 490,560 shares of Class B Common Stock into Class A Common Stock.
• This conversion was executed in connection with planned sales under a Rule 10b5-1 trading plan, which was adopted on February 12, 2025.
• The shares are indirectly held by Farquhar Investment Partnership No. 2.
• Each Class B Common Stock share is convertible into Class A Common Stock on a one-to-one basis at the reporting person's election and has no expiration date.
• Following this transaction, Farquhar indirectly beneficially owns 490,560 shares of Class A Common Stock and 48,024,933 shares of Class B Common Stock.

Sentiment

Score: 6

Explanation: Neutral to slightly negative. While the transaction is routine and pre-planned, the explicit mention of 'sales to be effected' indicates an upcoming reduction in insider ownership, which can sometimes be viewed with caution by the market, even if for diversification purposes.

Positives

• The transaction is part of a pre-arranged Rule 10b5-1 trading plan, indicating a structured and pre-disclosed approach to share sales, which can mitigate concerns about opportunistic insider selling.

Negatives

• The conversion is explicitly stated to be 'in connection with sales to be effected,' indicating an upcoming reduction in the insider's direct holding of Class A shares, which could be perceived negatively by some investors.

Risks

• Potential for increased selling pressure on Class A Common Stock due to the upcoming sales by a significant insider.
• Market perception of insider selling, even if pre-planned, could lead to short-term price volatility.

Future Outlook

The conversion of Class B shares to Class A shares indicates an intention by Scott Farquhar to sell a portion of his Class A holdings in the future, as part of a pre-established 10b5-1 trading plan.

Industry Context

This Form 4 filing is a routine disclosure of an insider transaction. Such pre-planned sales via 10b5-1 plans are common among executives and large shareholders in the technology industry, allowing them to diversify holdings while adhering to insider trading regulations.

Comparison to Industry Standards

• The use of a Rule 10b5-1 trading plan for share sales is a standard practice among executives and large shareholders in publicly traded companies, including those in the software and technology sectors like Microsoft, Apple, and Google. This mechanism provides an affirmative defense against insider trading allegations by pre-scheduling transactions when the insider is not in possession of material non-public information.
• The conversion of Class B to Class A shares is also typical for companies with dual-class share structures, often preceding market sales of the more liquid Class A shares.

Related Party Transactions

• Shares are held by Farquhar Investment Partnership No. 2, which is a related entity to the reporting person, Scott Farquhar.

Stakeholder Impact

• Shareholders: Potential for increased supply of Class A shares on the market due to upcoming sales, which could exert downward pressure on the stock price in the short term. However, the pre-planned nature via a 10b5-1 plan provides transparency and predictability.

Next Steps

• Execution of sales of Class A Common Stock by Scott Farquhar pursuant to the Rule 10b5-1 trading plan adopted on February 12, 2025.

Key Dates

Recommendation

Keywords

Atlassian, TEAM, Scott Farquhar, Form 4, Insider Trading, Beneficial Ownership, Class A Common Stock, Class B Common Stock, 10b5-1 Plan, Share Conversion, Director, 10% Owner