Intel Says CEO Dumping Tons of Stock Last Year 'Unrelated' to Big Security Exploit

Photo: Intel
Photo: Intel

Late last year, the CEO of Intel sold millions of dollars in company stock, as CEOs often do. The sale appears to have occurred while developers were reportedly rushing to fix a major security flaw affecting Intel processors made in the last decade.


According to a report published by the Register yesterday, “a fundamental design flaw in Intel’s processor chips has forced a significant redesign of the Linux and Windows kernels to defang the chip-level security bug.” Windows and Linux developers have reportedly been working to address the issue since November.

As our friends at Gizmodo ES pointed out (via Hacker News), Intel’s CEO Brian Krzanich sold roughly $11 million in company stock at the end of November. Counting the employee stock options Krzanich exercised, the CEO unloaded 245,743 shares, leaving him with 250,000 remaining shares—the minimum Krzanich is required to own according to the company’s bylaws, the Motley Fool reported.

To be clear, this isn’t proof of some insider-trading conspiracy. Contacted by Gizmodo, an Intel spokesperson called the sale “unrelated,” and said it “was made pursuant to a pre-arranged stock sale plan (10b5-1) with an automated sale schedule.”

As the Fool reported in mid-December, it’s possible Krzanich sold his shares for a normal, personal reason, like to buy a house. It’s also possible Krzanich is down on some aspect of Intel’s growth prospects. From the Fool’s Ashraf Eassa:

...given that Krzanich seems to have sold all the shares he could save for those he is required by Intel’s corporate bylaws to hold, the impression that I get is that Krzanich doesn’t have a ton of faith in the potential for Intel stock to appreciate, perhaps driven by a lukewarm (or potentially even negative) view of the company’s near- to medium-term business prospects.

2017 was a turnaround year for Intel’s primary competitor in the client computing space, AMD, and this trend could continue into 2018. And yes! A decade-old security flaw could also cause you to be “lukewarm” on any company, couldn’t it?

Intel acknowledged the exploits in a press release this afternoon. “Recent reports that these exploits are caused by a ‘bug’ or a ‘flaw’ and are unique to Intel products are incorrect,” the statement said. “Based on the analysis to date, many types of computing devices — with many different vendors’ processors and operating systems — are susceptible to these exploits.” Intel said it’s “working closely with many other technology companies, including AMD, ARM Holdings and several operating system vendors, to develop an industry-wide approach to resolve this issue promptly and constructively.” Intel also downplayed performance issues that may be caused by the fix.


This isn’t the first time in recent memory that a top executive has raised eyebrows by dumping stock ahead of bad news. Shortly after Equifax disclosed its enormous data breach affecting 143 million U.S. consumers, the timeline of stock sales by three executives at the company was scrutinized. Later, Equifax said an internal investigation had found that “none of the four executives had knowledge of the incident when their trades were made.” Often, executives pre-schedule stock sales to avoid any perceived conflicts of interest.

Intel’s stock slipped by more than four percent today during regular trading. Rival AMD’s stock, meanwhile, climbed by more than seven percent. Despite the price drop, Intel’s stock is still trading above where it was when Krzanich disclosed his stock sales.


Senior news editor at Gizmodo


I’m sure they’ll conduct an internal investigation and clear themselves of any wrongdoing.