Intel Corp.

shares fell nearly 2 percent on Thursday as investors worried about

the potential financial liability and reputational hit from recently disclosed
security flaws in its widely used microprocessors.

The largest chipmaker had confirmed on Wednesday that flaws reported by

researchers could allow hackers to steal sensitive information from computers,
phones and other devices. Apple Inc., Microsoft Corp. and other software
makers have issued patches to protect against the vulnerabilities.

Intel may be on the hook for costs stemming from lawsuits claiming that the
patches would slow computers and effectively force consumers to buy new
hardware, and big customers will likely seek compensation from Intel for any
software or hardware fixes they make, security experts said.

“The potential liability is big for Intel,” said Eric Johnson, dean of Vanderbilt
University’s Owen Graduate School of Management. “Everybody will be
scrambling over the next few days to figure out just how big it is.”

Intel has said that the patches for the bugs would slow its chips down
somewhat but that most users will not notice.

Amazon Web Services, the largest seller of cloud computing services, said in a
statement it does not “expect meaningful performance impact for most
customer workloads.”

Microsoft and Alphabet Inc.’s Google both said in statements on their websites
that they expect few performance problems for most of their cloud computing
customers.

But the incident is likely to spur cloud companies to press Intel for lower
prices on chips in future talks, said Kim Forrest, senior equity research analyst
at Fort Pitt Capital Group in Pittsburgh, which owns shares in Intel.

“What [Intel’s cloud customers] are going to say is, ‘You wronged us, we hate
you, but if we can get a discount, we’ll still buy from you,’” Forrest said.

Forrest also expects Intel will have to increase its chip development spending
to focus on security.

Government agencies and security experts said they knew of no cyberattacks

that had exploited the vulnerabilities.

Financial services firms were studying information on the vulnerabilities to

determine how to best respond, said the Financial Services Information
Sharing and Analysis Center, a global industry group known as FS-ISAC that
shares data on cyber threats.
Banks and other firms are trying to understand what it will cost to respond to
the issue, FS-ISAC said in an emailed statement.

Lawyers filed a lawsuit in San Jose, Calif., federal court on Wednesday that
sought class action status and compensation for people who had bought
vulnerable Intel chips or computers that came with them already installed.

Intel did not immediately respond to a request for comment on Thursday

about the lawsuit.

While more lawsuits are expected, Intel’s biggest customers are likely to
quietly seek compensation for any harm caused by the vulnerabilities,
including costs to patch machines or replace microprocessors, Johnson said.

Legal experts said that consumers would have to prove concrete damages and
harm to proceed with claims.

Intel shares fell 1.8 percent, following a 3.4 percent decline Wednesday.

CEO sold $39 mil. in shares

SANTA CLARA, Calif. (AP) — Intel’s CEO sold shares in his company several
months after Google informed the chipmaker of a serious security problem
affecting its products.

CEO Brian Krzanich sold about $39 million in stocks and options in late
November, before the security vulnerability was publicly known. Intel says it
was notified about the bugs in June.

The company didn’t respond to inquiries about the timing of Krzanich’s

divestments, but a spokeswoman told MarketWatch it was unrelated to the
security flaws.

Krzanich made about $25 million in profits, before taxes, from the sale, which
was disclosed in government filings made at the time. The sale allowed
Krzanich to whittle his holdings down to about 250,000 shares, the minimum
he is required to own under Intel’s rules.

Intel said it planned to publicly disclose the problem next week. It was forced
to address it earlier because of a Wednesday news report
The Associated PressSEOUL (AP) — South Korea’s president said
Wednesday he is open to meeting with North Korean leader Kim Jong Un if
certain conditions are met, as he vowed to push for more talks and
cooperation with the North to try to resolve the nuclear standoff.

President Moon Jae In has previously floated the idea of a summit with Kim
under conditions. But his latest comments came a day after the North agreed
to send a delegation to next month’s Winter Olympics in South Korea and hold
military talks on reducing animosities along their tense border — the measures
that Moon’s government has been demanding.

The accords, reached at the rivals’ first meeting in about two years, were
widely viewed as a positive step following a year of escalating tension over
Kim’s advancing nuclear and missile programs. But critics cautioned against
reading too much from the North’s moves because tensions could flare again
quickly as Pyongyang still openly seeks to expand its weapons arsenal. They
also say Kim may push for better ties with Seoul as North Korea feels the pain
of U.S.-led international sanctions.

During a televised news conference in Seoul, Moon described the North’s

Olympic participation as “very desirable,” but said that inter-Korean relations
cannot be improved without progress in the nuclear standoff and vice versa.

Moon said North Korea will face harsher international sanctions and pressure
if it resorts to fresh provocations, adding that “denuclearization of the Korean
Peninsula is the path to peace and our goal.”

U.S. President Donald Trump on Saturday said he was open to talking with
Kim himself while expressing hope for progress from the Korean talks. But
U.N. Ambassador Nikki Haley later said Washington isn’t changing its
conditions on talks with North Korea, saying Kim first needs to stop weapons
testing for a “significant amount of time.”

Trump recently also contended his tough stance helped persuade the North to
sit down with the South. During Wednesday’s conference, Moon said he feels
thankful to Trump for helping make the talks happen