Cloudflare President Michelle Zatlyn Sells $35.2M in Shares Under 10b5-1 Plan

Executive Overview

On October 7, 2026, Cloudflare, Inc. ($NET) co-founder, President, and Board Co-Chair Michelle Zatlyn filed a Form 4 disclosing the exercise of stock options and concurrent sale of 99,009 shares of Class A Common Stock across three consecutive trading days (October 5, October 6, and October 7, 2026). The aggregate gross proceeds from the disposals totaled approximately $35.24 million.

Transaction Breakdown

1. Option Exercises & Conversions:

   • Exercised 33,003 employee stock options per day (99,009 total) at an exercise price of $2.04 per share into Class B Common Stock.
   • Immediately converted the 99,009 shares of Class B Common Stock into Class A Common Stock on a 1:1 basis.

2. Open-Market Sales:

   • October 5, 2026: Sold 33,003 shares at weighted average prices ranging from $349.07 to $356.05 (~$11.64M gross proceeds).
   • October 6, 2026: Sold 33,003 shares at weighted average prices ranging from $364.39 to $369.34 (~$12.10M gross proceeds).
   • October 7, 2026: Sold 33,003 shares at weighted average prices ranging from $346.40 to $352.25 (~$11.49M gross proceeds).
   • All sales were conducted pursuant to a pre-arranged Rule 10b5-1 trading plan adopted on February 27, 2026.

Post-Transaction Holdings

Following these transactions, Zatlyn retains significant economic exposure to Cloudflare:

• Direct Ownership: 315,300 shares of Class A Common Stock.
• Indirect Holdings: 69,775 Class A shares held via The Sutherland/Zatlyn Revocable Trust, and 19,615 Class A shares held via the SZ 2021 Irrevocable Trust.
• Derivative Holdings: 891,081 remaining vested stock options, alongside multi-million share Class B common stock positions held across various family and annuity trusts.

Market & Significance Assessment

• Trading Significance: Medium
• While the total dollar volume is substantial ($35.2M+), the sales were executed pursuant to a pre-established Rule 10b5-1 plan and tied to option exercises expiring in August 2027. Consequently, the transaction reflects standard executive liquidity and tax planning rather than an opportunistic shift in operational sentiment.