Cloudflare Insider Sold Over $19.83 Million In Company Stock

Matthew Prince, CEO And Chair The Board at Cloudflare NET, made a large insider sell on September 15, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Prince sold 157,155 shares of Cloudflare at a price of $126.02 per share. The total transaction amounted to $19,826,005.

Update: A previous version of this article stated that Prince no longer owns shares of Cloudflare. A reputable source has informed us that Mr. Prince is still the largest individual shareholder of the company.

Cloudflare shares are trading up 0.15% at $128.75 at the time of this writing on Thursday morning.

Why Insider Transactions Are Important

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

In legal terms, an "insider" refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Transaction Codes To Focus On

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Cloudflare's Insider Trades.