Astounding coincidence: Intel's CEO liquidated all the stock he was legally permitted to sell after learning of catastrophic processor flaws

Originally published at:


“Intel CEO Sold Stock as Planned Months in Advance and Didn’t Do Any Better or Worse Than If He Had Held His Stock and Sold After Flaws Were Announced.”

From the article:

"As a result of his stock sale, Krzanich received more than $39 million. Intel stock, as of today, is trading at roughly the same price as Krzanich sold stock at, so he did not yield any significant gain from selling before the vulnerability was announced. But the sale may still bring scrutiny from the Securities and Exchange Commission for a number of reasons.

The Rule 10b5-1 plan under which Krzanich scheduled the stock sale is intended to shield executives from accusations of insider trading."


Sheer coincidence. He just wanted to settle his… uh… bar bill. Yeah, that’s it.


These guys set up these plans to sell stock automatically. If you can show he changed is 10b5-1 plan earlier, in response to the flaw, my interest would be piqued. But not unless.


Known as a




From the article (emphasis mine): “Krzanich scheduled those sales on October 30. That’s a full five months after researchers informed Intel of the vulnerabilities.”


More than four five months, give or take a few days?


It looks like @jacklecou has given me my answer.

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Totally Astounding coincidence:


It was feature, before it became a bug…


Yes, but is this in line with previous years’ sales by him? If he’s done the same sale every year, then it doesn’t really matter that the sale was scheduled in October - he could prove intent to sell based on the previous years’. Does anyone know where to look up previous years’ sales by him to see if this is the case?

Also, regardless of if it’s new, I have serious doubts this revelation is going to affect Intel’s stock prices at all. People still need computers, so it’s not like chip sales are going to fall because of this. Maybe if there were competitors without this flaw it’d be an issue, but AMD and ARM are both in the same boat, and I don’t know of any other real competitors in the field.


Not prevent insider trading, just deter the accusations.

Unusually honest reporting.


…because our demands for processors are getting less and intel has lots of competition? i kid, they are in a position where this will only benefit them.

processors are not warranted, any flaw just means they get to sell a ton of replacements and will likely see a stock increase. He’s going to be sad he sold before the profits that will result from replacements kick in.

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Intel CEO: “There isn’t a kernel of truth to these accusations!”
SEC: “Pigs can fly. Pigs can fly. Pigs can fly. Pigs can fly. Hypothetically, if pigs could fly, do you remember selling your stock because of the Meltdown vulnerability?”
Intel CEO: “Ye–No.”

I’m sorry.

You can look for yourself. I’m not going to take the time to graph it or anything, but it looks pretty precipitous to my cursory eyeballing. That end of year 2017 sale is an order of magnitude larger than any other single trade, at least as far back as that record goes.

I’d agree that you wouldn’t expect long term demand for processors to be affected much, at least overall, but who knows – maybe Krznich knows something else we don’t. Note that he sold literally everything he could, down to exactly the bare minimum the sitting CEO must hold per the corporate charter*. Doesn’t exactly scream confidence, does it?

* He may still have some options left – Bloomberg lists 757,000 unexecercised. I can’t tell if that data has been updated since the trade.


It’s notable that he’d been down around that much before, he was under 300,000 (250k seems to be the minimum) twice in the last couple years, in January of the prior two years. However, I don’t have the details to identify why he was able to trade so many more shares than he held, because I guess I don’t know stocks all that well?

Either way, I’m willing to let SEC investigators figure out wtf.

Sorted by automatic sales -

49 PM


So if there were other sources of processors, they would come to you? Doesn’t that classic capitalist fairy tale about enlightened self-interest mean that consumers will seek out other companies to see what their options are?

It’s probably neither a safe nor convenient assumption to say that because you don’t happen to be aware of other options now, they might as well not exist, so it’s more prudent to patronize a manufacturer who uses scale to gloss over their shortcomings.

The extra stock in the sale was the result of exercising options - which is basically a right to buy a share from the company at (way) below market value. It’s frequently used as a form of executive compensation.

And yeah, it looks like he’s typically holding somewhere above a quarter million shares (the minimum), but never above half a million or so. I assume that prior sales basically reflected the amount of stock he received as compensation, either directly or as options, and the usual strategy was to sell that off here and there to maintain both diversity in his portfolio and a significant stake in the company he leads (+ withdrawing cash, natch).

But the November transaction is anomalous. Looking more carefully at this compensation sheet again, I’m noticing it lists “exercised options” at just 184K. I think that means the 700K odd options he exercised to make the November sale must have come out of what is still listed there as unexercised. IOW, he not only sold off everything he was holding above 250K, he also exercised and liquidated all or almost all of the considerable quantities of options he’d been holding onto.

Maybe they’d just matured or something, but Intel hasn’t come forward with any particularly innocent sounding explanations beyond “it was pre-planned” (after the fact). So, yeah, I hope the SEC moseys on over and takes a peek, at least for curiosity’s sake.


The problem is that in an industry like computer processor manufacturing, it is entirely a safe assumption. The barriers of entry on the desktop market are so high that it’s impossible for a new player to easily enter the field. Really, the only threat to the Intel/AMD market dominance at this point is the migration to tablets.

Simply put, nobody else is anywhere near the speed and production levels of Intel/AMD at this point, the required investment to even get into the market is astronomical, and by the time anyone could be, this issue will most likely be resolved. Add onto that the fact that in order not to fall into the same trap they’d have to invent a new method of multi-threading and out-of-order execution (which will be implemented by Intel/AMD/ARM as soon as one’s discovered), and you’ve got a situation where it’s simply not happening.

If there were any other player positioned to actually replace those three in their markets, you can bet they’d be advertising the hell out of that fact right now. But there isn’t anyone doing that, because there isn’t anyone else positioned to realistically do so within the next few years. Could I be wrong? Sure - and I’d love that. The Intel/AMD stranglehold on the desktop market is not something I consider a good thing, but ever since Cyrix exited the market a few decades ago there haven’t been any other real options that have presented themselves.

It is what it is. But don’t mistake my statement of how the market is as an endorsement of it.


Thanks for the link - I didn’t know NASDAQ had those filings charted out on their site. Unfortunately, the sales/purchase numbers don’t seem to add up all the time, so I’m not sure how to read it (maybe it’s stock options messing with the numbers?).

In any case, while that last sale is somewhat anomalous (especially since he sold everything he could), it’s not totally out of line with the rest of his sales history. I guess we’ll just have to trust the SEC to look into it and see if it’s a problem. (Shit, wait… did Trump appoint a new SEC head? Has the SEC been gutted by him, yet? Maybe we are totally fucked on this one…)