Cerebras director-linked funds convert 15.3M shares
Cerebras Systems Inc. director‑affiliated funds reported large share conversions tied to the company’s IPO structure.
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Form Type
4
Rhea-AI Filing Summary
Cerebras Systems Inc. director‑affiliated funds reported large share conversions tied to the company’s IPO structure. Entities associated with Steven Vassallo converted multiple series of redeemable convertible preferred stock into 15,302,343 shares of Class B common stock in an exempt transaction under Rule 16b‑7, then recorded a related Class B to Class A conversion right. Following these transactions, Foundation Leadership Fund, Foundation Capital VIII Principals, and Foundation Capital VIII together hold 15,302,343 shares of Class B common stock indirectly for Mr. Vassallo, who disclaims beneficial ownership beyond his economic interest.
Insider Trade Summary
30,604,686 shares exercised/converted
Exercise
6 txns
Insider
Vassallo Steven
Role
Director
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Conversion | Series A Preferred Stock | 12,588,235 | $0.00 | $0.00 |
| Conversion | Series B Preferred Stock | 1,425,394 | $0.00 | $0.00 |
| Conversion | Series C Preferred Stock | 111,765 | $0.00 | $0.00 |
| Conversion | Series D Preferred Stock | 30,968 | $0.00 | $0.00 |
| Conversion | Series E Preferred Stock | 1,145,981 | $0.00 | $0.00 |
| Conversion | Class B Common Stock | 15,302,343 | $0.00 | $0.00 |
Holdings After Transaction:
Series A Preferred Stock — 0 contracts (Indirect, See footnotes:);
Series B Preferred Stock — 0 contracts (Indirect, See footnotes:);
Series C Preferred Stock — 0 contracts (Indirect, See footnotes:);
Series D Preferred Stock — 0 contracts (Indirect, See footnotes:);
Series E Preferred Stock — 0 contracts (Indirect, See footnotes);
Class B Common Stock — 15,302,343 contracts (Indirect, See footnotes:)
Footnotes (5)
- F1. Immediately prior to the closing of the Issuer's initial public offering, each share of the Issuer's redeemable convertible preferred stock automatically converted and was reclassified into one share of Class B Common Stock in an exempt transaction pursuant to Rule 16b-7. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock.
- F2. Consists of (i) 1,091,411 shares of Class B common stock underlying Series E Preferred Stock held by Foundation Capital Leadership Fund II, L.P. ("Foundation Leadership Fund"); (ii) 265,414 shares of Class B common stock underlying Series A Preferred Stock, 30,053 shares of Class B common stock underlying Series B Preferred Stock, 2,356 shares of Class B common stock underlying Series C Preferred Stock, 653 shares of Class B common stock underlying Series D Preferred Stock, and 1,151 shares of Class B common stock underlying Series E Preferred Stock held by Foundation Capital VIII Principals Fund, LLC ("Foundation Capital VIII Principals");...(continued in footnote 3)
- F3. (continued from footnote 2)...and (iii) 12,322,821 shares of Class B common stock underlying Series A Preferred Stock, 1,395,341 shares of Class B common stock underlying Series B Preferred Stock, 109,409 shares of Class B common stock underlying Series C Preferred Stock, 30,315 shares of Class B common stock underlying Series D Preferred Stock, and 53,419 shares of Class B common stock underlying Series E Preferred Stock held by Foundation Capital VIII, L.P. ("Foundation Capital VIII," and together with Foundation Leadership Fund and Foundation Capital VIII Principals, "Foundation Capital").
- F4. Foundation Capital Management Co. VIII, L.L.C. is the General Partner of Foundation Capital VIII and the Manager of Foundation Capital VIII Principals and has sole voting and investment power with respect to the securities held by Foundation Capital VIII and Foundation Capital Principals. Steven P. Vassallo is a Manager of Foundation Capital Management Co. VIII, L.L.C. and may be deemed to beneficially own such shares. Foundation Capital Management Co. LF II, L.L.C. is the General Partner of Foundation Capital Leadership Fund and has sole voting and investment power with respect to the securities held by Foundation Capital Leadership Fund. Mr. Vassallo is a Manager of Foundation Capital Management Co. LF II, L.L.C. and may be deemed to beneficially own such shares. Mr. Vassallo disclaims beneficial ownership of the securities reported herein, except to the extent of his pecuniary interest therein.
- F5. Following the transactions reported herein, consists of (i) 1,091,411 shares of Class B common stock held by Foundation Leadership Fund, (ii) 299,627 shares of Class B common stock held by Foundation Capital VIII Principals, and (iii) 13,911,305 shares of Class B common stock held by Foundation Capital VIII.
Key Figures
Class B shares after transactions: 15,302,343 shares
Foundation Leadership Fund holding: 1,091,411 shares
Foundation Capital VIII Principals holding: 299,627 shares
+2 more
5 metrics
Class B shares after transactions
15,302,343 shares
Indirectly held by affiliated funds following conversions
Foundation Leadership Fund holding
1,091,411 shares
Class B common stock held after conversions
Foundation Capital VIII Principals holding
299,627 shares
Class B common stock held after conversions
Foundation Capital VIII holding
13,911,305 shares
Class B common stock held after conversions
Derivative conversions recorded
6 transactions
Conversion of preferred and Class B securities on May 15, 2026
Key Terms
redeemable convertible preferred stock, Rule 16b-7, initial public offering, pecuniary interest, +1 more
5 terms
redeemable convertible preferred stock financial
"each share of the Issuer's redeemable convertible preferred stock automatically converted"
A redeemable convertible preferred stock is a special class of company shares that combines three features: it pays priority dividends like a safer, higher-ranking share; it can be converted into regular common shares so holders can join in upside; and it can be redeemed, meaning the company can buy it back for cash. For investors this matters because it offers a mix of downside protection and potential upside, but can change ownership stakes (dilution) and cash obligations depending on whether it’s converted or redeemed.
Rule 16b-7 regulatory
"automatically converted and was reclassified into one share of Class B Common Stock in an exempt transaction pursuant to Rule 16b-7"
A U.S. Securities and Exchange Commission safe-harbor rule that shields corporate insiders (officers, directors and large shareholders) from automatic short-swing profit claims when they buy or sell their company’s stock under a pre-approved, written plan that follows specific timing and nondiscretionary rules. For investors, the rule matters because it distinguishes routine, formula-driven insider transactions from opportunistic trades that could trigger automatic profit recoveries—think of it as an approved autopilot for insider trading that reduces legal uncertainty when the plan’s conditions are met.
initial public offering financial
"Immediately prior to the closing of the Issuer's initial public offering, each share"
An initial public offering (IPO) is when a private company first sells its shares to the public and becomes a stock-listed company. It matters because it allows the company to raise money from a wide range of investors, helping it grow, while giving early shareholders a way to sell some of their ownership.
pecuniary interest financial
"Mr. Vassallo disclaims beneficial ownership of the securities reported herein, except to the extent of his pecuniary interest therein"
beneficial ownership financial
"may be deemed to beneficially own such shares"
Beneficial ownership means the person or entity that actually enjoys the benefits of owning shares or other assets — such as receiving dividends, voting rights, or price gains — even if the legal title is held in another name. For investors it matters because knowing who truly controls and profits from a company reveals who can influence decisions, exposes potential conflicts of interest or hidden concentration of power, and affects transparency and risk in the stock.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What did the Cerebras Systems (CBRS) Form 4 for Steven Vassallo report?
The Form 4 reports that entities associated with director Steven Vassallo converted multiple series of redeemable convertible preferred stock into Class B common stock in an exempt transaction under Rule 16b-7, as part of Cerebras Systems Inc.’s capital structure around its initial public offering.
How is Rule 16b-7 relevant in the Cerebras Systems (CBRS) Form 4?
The filing states the preferred stock automatically converted into Class B common stock immediately before the IPO in an exempt transaction under Rule 16b-7. This rule provides an exemption for certain insider-to-issuer or reclassification transactions from short-swing profit recovery rules.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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