KEY POINTS

  • Technology stocks took a hit today.
  •  A big insider stock sale that had just happened made this hit even harder.

What’s going on with Cloudflare stock?

Cloudflare stock was sinking on Tuesday, but it wasn’t a good day for tech stocks overall. The content delivery network (CDN) operator’s stock was down 10.5% by the end of the day amid a broad sell-off in tech on renewed inflation fears, plus a prominent insider’s share sale of shares.

Why we care

On Tuesday afternoon, the tech sector was taking a significant hit for hardly the first time this year. Inflation worries lead to concerns about future interest rates. As a result, safe investments like bonds become more attractive, while riskier options fall out of favor. Because they are inherently more dangerous, investors frequently lump technology stocks into the “more risky” category.

However, there was more drama in the market on that day. According to Streetinsider.com, CEO Matthew Prince filed paperwork to sell 471,456 shares of Cloudflare (NYSE:NET) stock. Prince cited information from Goldman Sachs (NYSE:GS), one of Cloudflare’s lead underwriters during its IPO.

According to reports, the sale took place on Friday, September 9, and the entire sum obtained from the transaction was about $31 million.

What now

It all came down shortly after a period when Cloudflare’s stock was doing reasonably well.

It was doing a better job of retaining its value than other technology companies, in large part due to the outstanding second-quarter results it released last month. Moreover, the firm set an all-time record for major client additions during the quarter, with 212 adds. Furthermore, this boost helped drive revenue up by 54% year over year, and earnings beats on both the line item and net income. It also gave Cloudflare the confidence to increase its guidance.

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