Form 4: Cloudflare CEO Matthew Prince Sells Shares Under 10b5-1 Plan

Cloudflare CEO Matthew Prince executed pre-planned sales of Class A Common Stock totaling 169,152 shares in early September 2025, following conversions from Class B shares.

Summary

• Matthew Prince, CEO and Co-Chair of Cloudflare, Inc. (NET), sold a total of 169,152 shares of Class A Common Stock between September 9 and September 11, 2025.
• These sales were conducted under a Rule 10b5-1 trading plan established on February 11, 2025.
• Prior to the sales, Prince converted Class B Common Stock into Class A Common Stock on a one-to-one basis.
• On September 9, 2025, 32,273 Class B shares were converted and 64,384 Class A shares were sold at weighted average prices ranging from $215.6155 to $219.0273.
• On September 10, 2025, 52,384 Class B shares were converted and 52,384 Class A shares were sold at weighted average prices ranging from $220.1332 to $224.7188.
• On September 11, 2025, 52,384 Class B shares were converted and 52,384 Class A shares were sold at weighted average prices ranging from $223.9809 to $229.7364.
• Following these transactions, Prince directly holds 367,251 Class A Common Stock and indirectly holds millions more through various trusts.
• Several re-registrations of shares between different trusts occurred on August 25, 2025, affecting the indirect beneficial ownership structure.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly negative. While insider selling can be a concern, the fact that it's under a 10b5-1 plan mitigates the negative perception significantly. The high sale prices are a positive for the seller, but the reduction in direct stake is a minor negative for investors looking for strong insider conviction.

Positives

• The sales were executed under a pre-arranged Rule 10b5-1 trading plan, indicating a planned liquidity event rather than a reaction to new, undisclosed negative information.
• The sales occurred at relatively high prices, ranging from approximately $215 to $230 per share, suggesting a favorable market for the transactions.

Negatives

• Significant insider selling by a key executive (CEO and Co-Chair) could be perceived negatively by some investors, even if pre-planned, as it reduces the executive's direct equity stake.
• The total of 169,152 shares sold represents a substantial amount of stock.

Future Outlook

The filing does not contain any forward-looking statements or guidance.

Management Comments

• No direct quotes or paraphrased statements from company management are provided in this Form 4 filing, beyond the factual reporting of transactions.

Industry Context

This Form 4 filing reports routine insider transactions under a pre-arranged trading plan and does not provide information relevant to broader industry trends or competitor analysis.

Related Party Transactions

• Matthew Prince's indirect beneficial ownership is held through various family trusts (e.g., Matthew Prince Revocable Trust, Prince Family Nonexempt Irrevocable Trust, Grantor Retained Annuity Trusts, Remainder Trust), which are considered related parties.
• Shares were re-registered between these trusts on August 25, 2025, indicating internal transfers among related entities.

Stakeholder Impact

• Shareholders: The sale of shares by a key executive could be viewed with slight caution, though the 10b5-1 plan mitigates concerns about opportunistic selling. The overall impact on the company's operations or strategic direction is likely minimal given the pre-planned nature.
• Employees, Customers, Suppliers, Creditors: No direct impact on these stakeholders is indicated by this transaction report.

Key Dates

Recommendation

The filing details pre-planned insider sales by the CEO under a Rule 10b5-1 plan. While significant in volume, these sales are for personal financial planning and diversification, not indicative of a change in company fundamentals or a lack of confidence. The stock was sold at favorable prices. Given the routine nature of these transactions and the executive's continued substantial indirect holdings, a 'hold' recommendation is appropriate, as this filing alone does not present new information warranting a change in investment thesis.

Keywords

Cloudflare, NET, Matthew Prince, Insider Trading, Form 4, Stock Sale, 10b5-1 Plan, Class A Common Stock, Class B Common Stock, CEO, Director, 10% Owner