Form 4: Cloudflare President Michelle Zatlyn Exercises Options and Sells Shares Under Pre-Arranged Plan

Sentiment:

Insider Trading Report 17 July 2025 7:51 PM

Cloudflare President and Board Co-Chair Michelle Zatlyn executed a series of transactions, exercising stock options and subsequently selling 76,923 Class A common shares over three days in July 2025, as part of a pre-arranged Rule 10b5-1 trading plan.

Summary

Michelle Zatlyn, President and Board Co-Chair of Cloudflare, Inc. (NET), engaged in a series of stock transactions from July 15 to July 17, 2025.
She exercised employee stock options to acquire a total of 76,923 Class B Common Stock shares at an exercise price of $2.04 per share.
Concurrently, these 76,923 Class B shares were converted into Class A Common Stock on a one-to-one basis.
Following the conversions, she sold all 76,923 Class A Common Stock shares in multiple transactions over the three days.
The sales occurred at weighted average prices ranging from $181.2784 to $191.0702 per share.
These transactions were conducted pursuant to a Rule 10b5-1 trading plan adopted on February 14, 2025.
After these transactions, Michelle Zatlyn directly holds 381,213 Class A Common Stock shares and indirectly holds 51,646 Class A Common Stock shares through The Sutherland/Zatlyn Revocable Trust and The SZ 2021 Irrevocable Trust.
She also directly holds 2,133,325 Class B Common Stock options and indirectly holds 7,080,445 Class B Common Stock shares through various trusts, all convertible to Class A.

Sentiment

Score: 5

Explanation: The filing reports routine insider transactions (option exercise and subsequent sale under a pre-arranged plan), which are neutral in sentiment. It reflects a planned liquidity event rather than a reaction to new company performance or strategic shifts.

Positives

The exercise of employee stock options indicates the realization of value from long-term incentives.
The transactions were conducted under a pre-arranged Rule 10b5-1 trading plan, indicating a planned and transparent approach to stock sales rather than a reaction to immediate market conditions.
Michelle Zatlyn retains substantial direct and indirect beneficial ownership in Cloudflare, including 381,213 Class A Common Stock shares directly and millions of Class B Common Stock shares convertible to Class A, demonstrating continued alignment with shareholder interests.

Negatives

The sale of 76,923 Class A Common Stock shares by a high-ranking executive could be perceived negatively by some investors, as it reduces their direct equity stake.

Future Outlook

Industry Context

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Policy Adherence	The sales were conducted pursuant to a Rule 10b5-1 trading plan adopted on February 14, 2025, demonstrating adherence to insider trading policies designed to prevent trading on material non-public information.	2025-02-14	Enhances transparency and reduces the perception of opportunistic insider trading.

Related Party Transactions

Shares are held indirectly by The Sutherland/Zatlyn Revocable Trust dated November 17, 2016, for which the reporting person serves as co-trustee.
Shares are held indirectly by The SZ 2021 Irrevocable Trust dated November 6, 2021, for which the reporting person serves as the appointer.
Shares are held indirectly by The SZ 2020 Irrevocable Trust dated November 25, 2020, for which the reporting person serves as an investment advisor.
Shares are held indirectly by The Sutherland/Zatlyn 2023 Annuity Trust II dated August 29, 2023, for which the reporting person serves as co-trustee.
Shares are held indirectly by The Sutherland/Zatlyn 2024 Annuity Trust dated May 29, 2024, for which the reporting person serves as co-trustee.
Shares are held indirectly by The Sutherland/Zatlyn 2024 Annuity Trust II dated August 19, 2024, for which the reporting person serves as co-trustee.
Shares are held indirectly by The Sutherland/Zatlyn 2024 Annuity Trust III dated November 12, 2024, for which the reporting person serves as co-trustee.
Shares are held indirectly by The Sutherland/Zatlyn 2025 Annuity Trust dated May 23, 2025, for which the reporting person serves as trustee.

Stakeholder Impact

Shareholders: The sale of shares by a high-ranking executive could lead to minor concerns about management's conviction, though the pre-arranged nature of the sale mitigates this. The continued substantial indirect and direct holdings demonstrate ongoing alignment with shareholder interests.

Key Dates

Date	Description
2016-11-17	Date of The Sutherland/Zatlyn Revocable Trust.
2020-11-25	Date of The SZ 2020 Irrevocable Trust.
2021-11-06	Date of The SZ 2021 Irrevocable Trust.
2023-08-29	Date of The Sutherland/Zatlyn 2023 Annuity Trust II.
2024-05-29	Date of The Sutherland/Zatlyn 2024 Annuity Trust.
2024-08-19	Date of The Sutherland/Zatlyn 2024 Annuity Trust II.
2024-11-12	Date of The Sutherland/Zatlyn 2024 Annuity Trust III.
2025-02-14	Date Rule 10b5-1 trading plan was adopted by the reporting person.
2025-05-23	Date of The Sutherland/Zatlyn 2025 Annuity Trust.
2025-07-15	Date of earliest reported transaction, including option exercise, conversion, and sale of Class A Common Stock.
2025-07-16	Date of additional option exercise, conversion, and sale of Class A Common Stock.
2025-07-17	Date of final reported option exercise, conversion, and sale of Class A Common Stock, and the filing date of the Form 4.
2027-08-07	Expiration date of employee stock options.

Keywords

Cloudflare, NET, Michelle Zatlyn, SEC Form 4, Insider Trading, Stock Option Exercise, Share Sale, Rule 10b5-1 Plan, Beneficial Ownership, Class A Common Stock, Class B Common Stock

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