Even with shares down nearly 75% in the last year, shares of Cloudflare (NET), a cloud services provider, may have further to fall. In its latest quarterly filing, Cloudflare noted large customer sales cycles continued to lengthen. Even worse, the company inserted new language suggesting its free offering is cannibalizing its paid offering:

“...we experienced a higher level of churn in our paying customer base due to pay-as-you-go customers converting to our free plans.”

With employee equity awards underwater, Cloudflare— which recently hired a new President of Revenue and Chief Marketing Officer— warned it will likely dilute shareholders to retain employees:

“Due to recent fluctuations in our share price, we have had, and may have to continue, to issue a greater number of shares for equity awards than in previous periods when our stock price was higher…”