Intel Corporation (NASDAQ:INTC)’s stock slide slowed on Thursday as it came to light that the Meltdown and Spectre vulnerabilities probably impacted chip designs by other companies as well. Analysts also helped do damage control for the chip maker, but unfortunately for CEO Brian Krzanich, the timing of his sale of millions of shares of Intel stock is being questioned.
Krzanich unloads Intel stock
Regulatory filings with the Securities and Exchange Commission reveal that he sold $24 million worth of Intel stock in late November, which was after his company knew about the vulnerabilities but before outsiders knew about them. According to Business Insider, Krzanich’s stock sale was after Google had told Intel about the serious vulnerability in its processors, but the security hole wasn’t made public until this week.
A regulatory filing in late November reveals that the chief executive received approximately 644,000 shares of Intel stock which vested at prices between $12.99 and $24.17, and then he sold them for an average of $44.05 per share. In addition to those vested shares, he sold about another 245,000 shares he owned before.
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After the stock sale, the number of shares Krzanich owned was reduced to exactly 250,000, which is the number of shares he is mandated to hold while serving as chief executive of the company, according to Intel’s corporate bylaws. The Intel CEO raked in over $39 million from the share sale, according to the regulatory filing.
Questions about Krznich’s trading plan
That sale was part of his 10b5-1 trading plan, which allows executives to set parameters ahead of time whereby shares of their companies will be sold. Executives use these trading plans to avoid allegations of insider trading at times such as this. It would be illegal for insiders to sell shares of their company based on information they know that hasn’t been revealed publicly. However, they can set a 10b5-1 trading plan up ahead of time to plot out a plan for stock sales.
However, unfortunately for Krzanich, the timing of his 10b5-1 trading plan is also problematic. The filing that reveals his Intel stock sale in November also states that he had adopted the plan just a month before, on Oct. 30, 2017. Researchers have said that Intel and other chip makers were told on June 1, 2017 about the Meltdown and Spectre vulnerabilities. Thus, even Krzanich’s 10b5-1 trading plan was put into place between the data he would’ve been told about them and the date the rest of the world learned of the vulnerabilities.
An Intel spokesperson told MarketWatch that the CEO’s sale of Intel stock was “unrelated” to the Meltdown and Spectre vulnerabilities, but that was the only comment on the matter. It may be too early to know whether Krzanich’s sale of Intel stock will be scrutinized by regulators, but it certainly seems possible.
Intel stock slid another 2% on Thursday, falling as low as $42.69 in intraday trading.