Advanced Micro Devices ’ recent turn in fortune, and rising stock price, certainly didn’t escape the notice of its executives and directors.

AMD (ticker: AMD) shares languished in the lower-single-digits from 2013 to 2015 (during which time it moved its stock listing to Nasdaq from the NYSE). But they nearly quadrupled in 2016. In February, we suggested the stock could double again as the company recaptures market share in graphics chips.

Selling stock is a delicate thing for insiders. Company executives and directors don’t want to give the appearance that they believe the stock has topped out or that they’ve lost faith in the company they serve.

Luckily a vehicle exists to automate trading by insiders and give a semblance of objectivity. Known as the Rule 10b5-1 trading plan, it is intended to remove the effect of an insider’s potential knowledge of material nonpublic information.

Yet it is the insider who defines the price, volume and date range for the transactions, or provides a formula to determine those parameters. The execution of a trade may reveal what that insider thinks is an intrinsically good price to sell or buy.


Mostly using such plans, AMD insiders have sold $31.4 million in stock so far this year, compared with a relative trickle of $1.8 million in all of last year. We are excluding sales of stock to cover tax-withholding obligations for the vesting of restricted stock units (RSU), which are taxed upon vesting, and for incremental tax liability.

One thing that can explain the surge in selling is that stock options that had been underwater for years--that is, ones that had exercise prices above the stock’s price on the open market--were finally in the money. Options with exercise prices as high as $8.80 could finally be used to obtain shares for a discount, but those options were expiring soon.

AMD director Bruce Claflin was the first to blink, adopting a Rule 10b5-1 trading plan on Oct. 31, 2016. Claflin, who had served as AMD’s chairman from March 2009 to May 2016, sold about $770,000 in AMD shares in 2017, most recently 20,000 shares on April 10, leaving him with ownership of nearly 640,000 shares. He sold $234,000 in stock last year. Claflin, a former chief executive of 3Com, apparently left AMD’s board earlier this year and is no longer subject to disclosure of his transactions in the company’s shares.

Forrest Norrod, senior vice president and general manager, Enterprise, Embedded, and Semi-Custom (EESC) Business Group, adopted a Rule 10b5-1 plan Nov. 16. Norrod has sold nearly $5.13 million in AMD through planned sales so far in 2017, most recently on Sept. 8 when he exercised options for 25,000 shares and sold 62,500 shares. He now holds about 670,000 shares. Norrod sold about $1.1 million in shares last year.


Two executives adopted plans on Nov. 18: Chief Financial Officer Devinder Kumar and Jim Anderson, senior VP and general manager, Computing and Graphics Business Group.

Kumar, who originally joined AMD in 1984, has sold more than $7.6 million in shares so far this year, most recently on Aug. 23 when he exercised options for 15,000 shares and sold 121,000 shares. Kumar now holds about 600,000 shares. He didn’t sell any stock for investment purposes in 2016, nor the year before. The last time Kumar sold shares in a transaction unrelated to tax liabilities was in August 2014 when he exercised options for nearly 25,000 shares and sold an equal number.

Anderson sold 20,000 shares for $265,000 on Sept. 22, and he has sold nearly $2.4 million in stock so far this year. Anderson, who joined AMD in May 2015, sold only $227,000 in stock in 2016. He now owns about 535,000 shares.

Darla Smith, chief accounting officer, adopted a trading plan on Nov. 28 and has sold $1.3 million in stock so far this year, most recently 22,000 shares on Aug. 22. She now owns about 25,000 shares. Previous to this year, Smith hadn’t sold for investment purposes since she was named in May 2016 to her current post, a position that requires disclosure of transactions.


Mark Papermaster, chief technology officer and senior VP, Technology and Engineering, adopted a Rule 10b5-1 trading plan Feb. 3. Papermaster, who joined AMD in October 2011, has sold $1.3 million in stock so far this year, most recently 39,000 shares on Aug. 14. He now owns 930,000 AMD shares. Sales this year mark his first for investment purposes.

President and CEO Lisa Su is the latest AMD seller to adopt a trading plan, holding out until Feb. 8. She has sold $10.2 million in shares so far this year, most recently on Sept. 12 when she exercised options for 262,500 shares and sold 325,000 shares. Su, who joined AMD in 2012 and was named to her current post in October 2014, now owns 1.8 million shares directly and 200,000 additional shares in a trust. Prior to this year, she hasn’t sold shares for investment purposes.

Harry Wolin, senior VP and general counsel, never adopted a trading plan, but he’s gone ahead with selling stock, anyway. Wolin has sold $1.6 million in AMD shares so far this year, most recently 47,000 shares on June 8. He now owns 923,000 shares. Wolin, who joined AMD in 2000, sold only $254,000 in stock last year.

All the insider sales are dwarfed by the government of Abu Dhabi reducing its AMD stake this year. Mubadala, the state’s investment arm and AMD’s largest shareholder, sold 85 million AMD shares earlier this year for a total of $1.14 billion, and now owns about 132 million shares, or a 12.9% stake.


Ahmed Yahia Al Idrissi, Mubadala’s representative on AMD’s board, doesn’t have a trading plan in place but sold $1 million in shares this year, all on Aug. 9. Yahia, a former McKinsey & Co. partner, has been an AMD director since November 2012.

Growth in AMD stock price hasn’t been deterred by executives or Abu Dhabi selling stock. Not even an all-time-high in short-selling has tamed the shares, which are up 25% for 2017 through Thursday, trouncing the Standard & Poor’s 500’s 14% gain.

A market-beating stock, insider trading plans, options exercising, major shareholders trimming back and short-selling on the rise--it all sounds like AMD is indeed returning to normalcy as a tech company.

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