Intel chief sold shares after company told of bugs

Muriel Hammond
January 6, 2018

Krzanich sold all of his Intel stock - except for 250,000 shares which he is required to hold as part of his employment contract - and exercised all of his stock options.

Intel CEO Brian Krzanich told CNBC on Wednesday that his company had been working with researchers at Google for a couple of months to solve this security problem.He also told CNBC that this exploit isn't being used by the hackers.News of the security flaw caused Intel's stock to fall sown on Wednesday. After the report was made public, Intel competitors, AMD and Microsoft saw their shares surge. But while the Intel CEO may be following the letter of the law, personally enriching yourself by $40 million after discovering a fundamental flaw in your company's product isn't exactly a good look, especially as other shareholders suffer. It says it planned to publicly disclose the problem next week.

But the sell off could draw even more scrutiny now, given the news about the security vulnerability and the timing of when Intel knew about it.

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.

In fact, Google informed Intel of the vulnerability in June, an Intel representative told Business Insider in a statement. And Intel has offered no further explanation of why Krzanich abruptly sold off all the stock he was permitted to.

But Krzanich only put that plan in place on October 30, according to the filing. The shares of Intel witnessed a slight drop ever since the news of security flaw came out in public, it is now being traded at around $44.23.

If you want to put things into perspective, despite the fall in Intel's share price this week; it's still trading much higher than when Krzanic sold his shares in November a year ago. Krzanich first exercised stock options by acquiring and then immediately selling about 644,000 shares on November 29, which left his original position unchanged. His decision to set up that plan was "unrelated" to information about the security vulnerability, the representative said.

We are calling it fishy because this week we learned about massive security flaw on Intel chips.

Krzanich sold shares 21 times during 2017, according to filing with the Securities and Exchange Commission.

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