CFLT - Incentives Win

CFLT signals -> IBM bid.

In late July we flagged some shift in incentives and an expectation of a takeout for Confluent (CFLT).

CEO was also on a $65k annual base salary with an out of cycle $15m one-time grant (which was added to 100% vest in a CiC scenario).

The most compelling part of this was that the two founders held majority voting power which provides huge sway and for them to be making the above preemptive changes at least implies they were in talks. I think this point at least doubles the signal:noise of an increase in CiC vs other situations. I will talk more about this in coming posts.

From $17 at which CFLT was flagged it was taken out at $31 a share, ~80% + in a matter of months. Worth noting that the incentive changes took place before the poor Q2 25 earnings.

Will be uploading an idea i think resembles a very similar set-up to CFLT in the coming days!