Intel CEO sold $24 million worth of shares before Chip Vulnerability

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Intel CEO sold $24 million worth of shares before Chip Vulnerability

06 January, 2018

Regulatory filings showed Mr Krzanich pocketed about $25m (£18.4m) before tax from the sale of stocks and options in late November. The Form 4 filed by Krzanich, however, state that the plan was adopted on October 30, 2017-months after Google says it informed Intel and other affected companies about the bugs in June, which in turn were only made public this week in reports by The Register and other media. Although Intel notes that the data can only be viewed and not modified or deleted, it does not make the vulnerability any less alarming.

We are calling it fishy because this week we learned about massive security flaw on Intel chips. Security researchers, led by Google's Project Zero, disclosed that a major flaw in the system architecture of processors made by Intel, ARM, and AMD allows for an exploit called Spectre, which could enable malicious users to access sensitive data such as password or credit-card information that normally should be siloed between different applications. But even without the fallout from Meltdown and Spectre (which included a 2% drop in Intel's share price after they were made public), Krzanich's sale is noteworthy because executives usually hold onto more shares than they are required to own to signal confidence to investors, so this will very likely cast a cloud over Krzanich's CES keynote address next week.

There are a number of reasons that an executive might sell off large portions of company stock, whether it be for personal reasons like making a large purchase or because they expect the company may underperform in some aspects and would like to cash in before the stock dips.

Intel says the stock sale was unrelated to the vulnerability, but came as part of a planned divestiture program. Intel's CEO saw a $24 million windfall November 29 through a combination of selling shares he owned outright and exercising stock options.

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On Thursday, Axios reported that Krzanich had revised his company's trading plan in October.

That means Intel was aware of the problem before Krzanich sold off a big chunk of his holdings.

Krzanich sold shares 21 times during 2017, according to filing with the Securities and Exchange Commission. A company spokeswoman said that Brian's sale was "unrelated" and that it was "in-line with corporate guidelines". It closed down $1.59, or 3.4%, to $45.26.

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