Form 4: Cloudflare CFO Sells Shares After Option Exercise

Cloudflare's Chief Financial Officer, Thomas J. Seifert, reported the exercise of stock options and subsequent sale of Class A Common Stock totaling 10,000 shares.

Summary

• Thomas J. Seifert, Chief Financial Officer of Cloudflare, Inc. (NET), reported transactions on January 20, 2026.
• Seifert exercised an employee stock option to acquire 10,000 shares of Class B Common Stock at an exercise price of $2.04 per share.
• Concurrently, 10,000 shares of Class B Common Stock were converted into Class A Common Stock on a one-to-one basis.
• A total of 10,000 shares of Class A Common Stock were sold in multiple transactions.
• The sales were executed pursuant to a Rule 10b5-1 trading plan adopted by Seifert on November 26, 2024.
• Weighted average sale prices for the Class A Common Stock ranged from $176.2688 to $181.98 per share.
• Following these transactions, Seifert directly beneficially owns 137,486 shares of Class A Common Stock and 80,341 shares of Class B Common Stock.
• Additional Class A Common Stock is indirectly owned through Center Court Partners Ltd. (150,000 shares) and three Center Court 2020 Trusts (46,100 shares each).

Sentiment

Score: 5

Explanation: Neutral. The filing reports routine insider transactions (option exercise and sale) executed under a pre-planned 10b5-1 trading plan, which is a common practice and does not inherently indicate positive or negative sentiment about the company's future.

Positives

• The transactions were executed under a pre-arranged Rule 10b5-1 trading plan, indicating planned activity rather than an immediate reaction to new information.
• The exercise of employee stock options suggests the options were in-the-money, allowing the executive to realize value from their compensation.

Negatives

• The sale of 10,000 shares by a key executive, even if pre-planned, could be perceived with slight caution by some investors.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• The reporting person indirectly holds 150,000 shares of Class A Common Stock through Center Court Partners Ltd., for which the reporting person serves as a partner.
• The reporting person indirectly holds 46,100 shares of Class A Common Stock through Center Court 2020 Trust 1 UA 12/11/20, for which the reporting person serves as trustee.
• The reporting person indirectly holds 46,100 shares of Class A Common Stock through Center Court 2020 Trust 2 UA 12/11/20, for which the reporting person serves as trustee.
• The reporting person indirectly holds 46,100 shares of Class A Common Stock through Center Court 2020 Trust 3 UA 12/11/20, for which the reporting person serves as trustee.

Stakeholder Impact

• Shareholders: The sale of shares by a CFO, even if pre-planned, might be viewed with slight caution by some investors, though it is a common liquidity event for executives. The exercise of options indicates the executive is realizing value from their compensation.

Key Dates

Recommendation

The filing is a routine Form 4 detailing insider transactions (option exercise and subsequent sale) executed under a pre-established 10b5-1 trading plan. Such transactions are common for executives seeking to diversify their holdings or for liquidity purposes and do not typically signal a change in the company's fundamental outlook or warrant a change in investment recommendation based solely on this report. Therefore, a 'hold' recommendation is appropriate as this filing provides no new material information to alter an existing investment thesis.

Keywords

Cloudflare, NET, Form 4, Insider Trading, Stock Option Exercise, Share Sale, CFO, Thomas J. Seifert, Rule 10b5-1