Form 4: Cloudflare CFO Sells $7.9M in Stock

Cloudflare's Chief Financial Officer, Thomas J. Seifert, reported the sale of 41,515 shares of Class A Common Stock totaling approximately $7.9 million, executed under a pre-arranged 10b5-1 trading plan.

Summary

• Thomas J. Seifert, Chief Financial Officer of Cloudflare, Inc. (NET), reported transactions on August 20, 2025.
• Seifert acquired 10,000 shares of Class A Common Stock through the conversion of Class B Common Stock.
• He subsequently sold a total of 41,515 shares of Class A Common Stock in multiple transactions at weighted average prices ranging from $185.3351 to $194.7433.
• The total value of the Class A Common Stock sold is approximately $7.9 million.
• All reported sales were conducted pursuant to a Rule 10b5-1 trading plan adopted on November 26, 2024.
• Following these transactions, Seifert directly holds 189,517 shares of Class A Common Stock.
• He also holds various derivative securities, including 130,341 Class B Common Stock from an exercised employee stock option, and additional Class B Common Stock indirectly through trusts and partnerships totaling 242,200 shares.

Sentiment

Score: 4

Explanation: The filing indicates significant insider sales, which can be viewed negatively, but these sales were executed under a pre-arranged 10b5-1 trading plan, suggesting they are not based on new, adverse information. The insider also converted and acquired shares, maintaining substantial overall holdings.

Positives

• The Chief Financial Officer acquired 10,000 shares of Class A Common Stock through conversion, demonstrating continued engagement with equity holdings.
• The sales were executed under a pre-arranged Rule 10b5-1 trading plan, indicating they were not based on new, adverse information about the company.

Negatives

• The Chief Financial Officer sold a significant number of shares, totaling 41,515 shares of Class A Common Stock, which represents a reduction in direct ownership.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• Indirect ownership of Class B Common Stock through Center Court Partners Ltd., for which the reporting person serves as a partner.
• Indirect ownership of Class B Common Stock through Center Court 2020 Trust 1 UA 12/11/20, Center Court 2020 Trust 2 UA 12/11/20, and Center Court 2020 Trust 3 UA 12/11/20, for which the reporting person serves as trustee.

Stakeholder Impact

• Shareholders may perceive the insider sales as a negative signal, although the pre-arranged nature of the sales mitigates this concern by indicating they are not a reaction to new, adverse company developments.

Key Dates

Recommendation

While the Chief Financial Officer's sale of a significant number of shares might initially appear concerning, it was executed under a Rule 10b5-1 trading plan adopted months prior. This indicates the sales are pre-scheduled and not a reaction to recent negative developments. The insider retains substantial direct and indirect holdings in the company. Therefore, this filing does not present new fundamental information warranting a change in investment strategy, suggesting a 'hold' recommendation for existing investors.

Keywords

Cloudflare, NET, SEC Form 4, Insider Trading, Stock Sale, Thomas J. Seifert, CFO, 10b5-1 plan, Class A Common Stock, Class B Common Stock