Cloudflare plans to go public; files S-1 with the SEC

Cloudflare announced its plans to go public and has filed an S-1 with the SEC (Securities and Exchange Commission) last week. This action taken by Cloudflare comes after it received a hoard of ‘negative publicity’ to the use of the network by the 8chan online forum, which is known to have inspired the mass shootings in El Paso, Texas, and ChristChurch, New Zealand.

“We are aware of some potential customers that have indicated their decision to not subscribe to our products was impacted, at least in part, by the actions of certain of our paying and free customers,” the filing says.

Post the El Paso mass shooting incident, a few days back, Cloudflare first continued to defend hosting 8chan calling it their ‘moral obligation’ to provide 8chan their services. However, after an intense public and media backlash, Cloudflare reversed their stance and announced that it would completely stop providing support for 8chan. To this, Jim Watkins, the owner of 8chan, said in a video statement, “It is clearly a political move to remove 8chan from CloudFlare; it has dispersed a peacefully assembled group of people.”

Cloudflare said they avoid cutting off websites for objectionable content as it can also “harm our brand and reputation”; however, it banned the Neo-Nazi website, Daily Stormer in 2017 after the website claimed that Cloudflare was protecting them and secretly agreed with the site's neo-Nazi articles.

“We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our platform, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this,” says the filing.

Cloudflare also plans to list shares on the New York Stock Exchange under the ticker symbol "NET," the filing mentioned. It has also raised just over $400 million from investors including Franklin Templeton Investments, Fidelity Investments, Microsoft and Baidu, Forbes states.

“Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others,” the company said in the filing.

According to Forbes, “The filing reveals that Prince owns 16.6% of the company, which (after factoring in a private company discount) is worth about $270 million based on the 2015 valuation. Zatlyn(co-founder) owns 5.6% of the company, worth about $90 million. Holloway(co-founder) owns a 3.2% stake. Cloudflare has not yet indicated the price range for selling its shares.”

Earlier this year, Fastly, another cloud provider also went public. “After pricing its IPO at $16 per share, Fastly’s equity skated higher in early trading. Today Fastly is worth $23.19 per share, up about 45 percent,” Crunchbase reported in July.

To know more about this news in detail, head over to the S-1 filing report.