--- title: "Cloudflare's Co-Founders Keep Selling Into the AI Story" type: news slug: cloudflare-zatlyn-prince-founder-selling-may-2026 canonical_url: https://13finsight.com/news/cloudflare-zatlyn-prince-founder-selling-may-2026 published_at: 2026-05-23T19:26:26.844Z updated_at: 2026-05-23T19:26:29.261Z author: Alex Rivera author_title: Breaking News Editor author_url: https://13finsight.com/authors/alex-rivera word_count: 917 locale: en source: 13F Insight --- # Cloudflare's Co-Founders Keep Selling Into the AI Story > Cloudflare President Michelle Zatlyn sold ~$92.7M over six months alongside CEO Matthew Prince's ~$187.3M — structured founder selling as AI demand accelerates. Cloudflare President and Board Co-Chair Michelle Zatlyn has kept up a steady cadence of stock sales into 2026, exercising options and selling Cloudflare (NET) shares in a pattern that mirrors her co-founder. Her most recent Form 4, filed May 19, 2026 (accession 0001786951-26-000006), continues a run of roughly 82 sales totaling about $92.7 million over the trailing six months. The context a transaction feed alone won't give you: Zatlyn is selling alongside CEO and fellow co-founder Matthew Prince, and both are doing it while Cloudflare describes the current moment as the strongest tailwind in its history. The company's Q1 2026 revenue rose 34% year over year to $639.8 million, and Prince called AI "a fundamental re-platforming of the Internet." This is co-founder distribution into strength — and, crucially, neither founder is anywhere close to exiting. That last point matters because Zatlyn's latest filing shows just 25,641 directly held Class A shares after her most recent sale, a number that looks alarming in isolation but badly understates her stake. What the Form 4 actually shows Zatlyn's recent activity follows an exercise-and-sell structure: she exercises options (Form 4 code M) and sells the resulting shares (code S), often on the same or adjacent days. In late April 2026, for example, she exercised 25,641 options across consecutive sessions and sold tranches at prices between roughly $207 and $212 per share. Reading only the Class A line on Table I would suggest she has almost nothing left. She does. Zatlyn's filing history shows she retains 1,492,300 shares through derivative securities reported in Form 4 Table II. The near-empty Class A figure reflects the mechanics of an exercise-and-sell program, not a departure — she holds nearly 1.5 million shares of continued exposure. Both co-founders are selling Zatlyn's selling does not stand alone. CEO and Board Co-Chair Matthew Prince has been the larger seller, with roughly 150 sales totaling about $187.3 million over the same six-month window. Prince also remains a major beneficial owner, having disclosed a 7.7% stake via a Schedule 13G earlier in 2026. When two co-founders sell in parallel, the natural question is whether it signals doubt. The more grounded read is that both are diversifying long-held, deeply-in-the-money equity through structured programs while retaining controlling-scale ownership. Prince's transaction record and Zatlyn's show steady distribution, not a rush for the exits. The business backdrop The selling is happening against accelerating fundamentals. Cloudflare's Q1 2026 revenue of $639.8 million (up 34% year over year) came with non-GAAP net income of $94.0 million, or $0.25 per diluted share, up from $0.16 a year earlier. Management has tied its optimism explicitly to AI demand, framing the shift in how software is built and delivered as the company's biggest-ever growth driver. Investor reaction to the quarter was mixed, with NET shares falling after the report despite the revenue beat — a reminder that for a high-multiple growth name, expectations are the real hurdle. That valuation backdrop is also why scheduled founder selling generates large dollar headlines. It also helps to know who owns the stock around the founders. Cloudflare's largest disclosed institutional positions have come from a mix of active and passive managers: Capital World Investors reported an 11.5% stake earlier in 2026 before trimming to 7.3%, Baillie Gifford has filed at levels above 5%, and Morgan Stanley disclosed a 5.3% position. These are sizable outside holders, but their presence is a separate signal from founder selling — institutional accumulation and structured founder distribution can, and here do, happen at the same time. Reading exercise-and-sell correctly The mechanics behind these filings are worth spelling out, because they are routinely misread. An exercise-and-sell transaction pairs an option exercise — which converts a right-to-buy into actual shares at a fixed strike price — with an immediate sale of those shares. The directly held Class A balance can stay low even as the executive realizes substantial value, because the newly exercised shares are sold rather than retained. When these trades run on a pre-set schedule, the timing is mechanical: the executive is not choosing to sell on any particular day in response to news. For founders sitting on years of accumulated equity awards, that structure is the standard way to convert paper wealth into cash without signaling a view on the business. What to watch The next checkpoints are Cloudflare's Q2 2026 earnings, which will test whether AI demand converts into sustained revenue acceleration, and the next Form 4 filings from both founders to confirm whether the current selling pace holds. Track both insiders on 13F Insight — Michelle Zatlyn's filings and Matthew Prince's — and follow institutional ownership on the Cloudflare stock page. FAQ Why is Cloudflare's Michelle Zatlyn selling stock? Zatlyn, Cloudflare's President and Board Co-Chair, has been exercising options and selling shares in a structured exercise-and-sell pattern, totaling about $92.7 million over six months. The sales coincide with strong fundamentals, not deteriorating ones. Did Michelle Zatlyn sell all her Cloudflare shares? No. Although her directly held Class A shares fell to 25,641 after her latest sale, she retains 1,492,300 shares via derivative securities reported in Form 4 Table II. Is Cloudflare CEO Matthew Prince also selling? Yes. Prince sold roughly $187.3 million across about 150 transactions over the trailing six months and disclosed a 7.7% beneficial stake via Schedule 13G earlier in 2026. How did Cloudflare perform in Q1 2026? Cloudflare reported Q1 2026 revenue of $639.8 million, up 34% year over year, with non-GAAP net income of $94.0 million, or $0.25 per diluted share. ## FAQ ### Why is Cloudflare's Michelle Zatlyn selling stock? Zatlyn, Cloudflare's President and Board Co-Chair, has been exercising options and selling shares in a structured exercise-and-sell pattern, totaling about $92.7 million over six months. The sales coincide with strong fundamentals, not deteriorating ones. ### Did Michelle Zatlyn sell all her Cloudflare shares? No. Although her directly held Class A shares fell to 25,641 after her latest sale, she retains 1,492,300 shares via derivative securities reported in Form 4 Table II. ### Is Cloudflare CEO Matthew Prince also selling? Yes. Prince sold roughly $187.3 million across about 150 transactions over the trailing six months and disclosed a 7.7% beneficial stake via Schedule 13G earlier in 2026. ### How did Cloudflare perform in Q1 2026? Cloudflare reported Q1 2026 revenue of $639.8 million, up 34% year over year, with non-GAAP net income of $94.0 million, or $0.25 per diluted share. --- Source: 13F Insight — https://13finsight.com/news/cloudflare-zatlyn-prince-founder-selling-may-2026 Author: Alex Rivera — https://13finsight.com/authors/alex-rivera Last updated: 2026-05-23T19:26:29.261Z