The stock closed after hours at $0.95. I wouldn't touch their stock with a 10-mile pole. It's exceedingly likely that all common shareholders will have their value completely wiped out during chapter 11 given what we now know about GTAT's financial state.
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GT Advanced Asks Court for Permission to 'Wind Down' Operations at Sapphire Plant
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The stock closed after hours at $0.95. I wouldn't touch their stock with a 10-mile pole. It's exceedingly likely that all common shareholders will have their value completely wiped out during chapter 11 given what we now know about GTAT's financial state.
Winding down operations... Seems someone has had enough of Apple and their ways. 
Not sure how anyone could NOT be surprised that holding a small company with a very expensive facility and staff to run it to an exclusivity agreement and then not buying said company's expensive product ends in bankruptcy...
Not sure how anyone could NOT be surprised that holding a small company with a very expensive facility and staff to run it to an exclusivity agreement and then not buying said company's expensive product ends in bankruptcy...
GT probably ran out of time
Building a sapphire screen that large and incorporating characteristics that limit breakage from shattering, while producing the volume required, in a time period that was so limited, was an impossible task. Apple probably found this out pretty early in the game. This kind of technology takes a lot of time, equipment and personnel to get it right.
Apple never said that they were going to use sapphire screens in the Iphone 6. It was the "analysts" who thought they had it figured out. To be able to produce a screen like this would be a huge marketing advantage. People would really factor this in when buying a phone.
I bet Apple is gathering people who understand how to make a durable sapphire screen and produce it in volume. We might see it in a couple of years, but not next year. It is already too late.
Building a sapphire screen that large and incorporating characteristics that limit breakage from shattering, while producing the volume required, in a time period that was so limited, was an impossible task. Apple probably found this out pretty early in the game. This kind of technology takes a lot of time, equipment and personnel to get it right.
Apple never said that they were going to use sapphire screens in the Iphone 6. It was the "analysts" who thought they had it figured out. To be able to produce a screen like this would be a huge marketing advantage. People would really factor this in when buying a phone.
I bet Apple is gathering people who understand how to make a durable sapphire screen and produce it in volume. We might see it in a couple of years, but not next year. It is already too late.
NOPE - I totally see Apple swooping in and playing the hero, buying the plant and surging forward. And why not?
It's still early in the process, be patient. Creditor actions, be it a buyout or repossession, take time to get approved. GTAT has a minimum 30 days before creditors can do anything. Apple's filing with the bankruptcy court will tell us what they want to do.
We don't know what the real story was with GTAT's sapphire. What Apple does next will tell us. If their sapphire process has a real chance at being viable Apple will try and salvage its investment. If Apple walks away then we know Apple thinks it's unfixable.
I'm sure the intent is for sapphire iphone screens. Why else did they build a 700 employee manufacturing facility? A facility just for camera lens, touchID, and Apple Watch "edition" would not need so many people.
I remember reading about shipments being shipped out of the GTAT facility presumably headed towards China. Also, additional labor still needed to be done in China to round off the edges of the sapphire. It was the rounding process which the Chinese contractors were having difficulties with and produced low yields of the finished product. (See link)
We've all been hearing how hard sapphire is and it is the hardest substance on the mohs scale next to moissanite and diamonds. Now imagine how many diamond dust polishing disc they have to go through to get a smooth surface. With sodium glass it wouldn't be an issue (softer material). Should we be blaming Jony Ive's design for this?
From what I understand, Apple owns the land and the building so they are the landlord. Apple does not own the equipment or technology for producing the sapphire crystal instead Apple have provided a substantial loan to GTAT to finance the equipment and signed an exclusive contract for production at the AZ facility. I believe GTAT is meant to be a just-in-time (JIT) production facility for Apple.
Because Apple has delayed future shipment GTAT is still bound by contract to pay its loan and operational cost. Without cash-flow from its deliveries GTAT is in a bind. This is why they need to file for Chapter 11 protection to get out or delay their obligations to Apple.
Both parties were very optimistic about the sapphire screens and how well it would be accepted in the marketplace, hence the huge outlay of cash by Apple and also its willingness to support the 700 employees of GTAT now.
I agree. Apple knew (or should have known) how sapphire would function in an iPhone screen before investing. It's possible that GT couldn't deliver on quality or quantity, but it's hard to believe that even Apple would have been able to make an arrangement with Corning or another supplier just weeks before the iPhone 6 introduction. There's a lot here that we don't know and may never know.
My conspiracy is simpler. CEO and insiders scams Apple. Stock gets pumped up due to Apple deal, CEO and insiders sell stock to cash in, also some mystery person sells 17,000 put contracts a month earlier that would expire on the same week they declare chapter 11.
Sounds more like your typical scam.
Those who immediately think "scam" must think Tim Cook/Apple are morons who don't do any due diligence - and just handed over money and ignored GTA until they came knocking and asking for the final sapphire for their devices.
Knowing Apple as much as some here pretend they do - does that sound extremely plausible? It certainly doesn't sound like it from the little we already know about the terms of the agreement and money invested.
Knowing Apple as much as some here pretend they do - does that sound extremely plausible? It certainly doesn't sound like it from the little we already know about the terms of the agreement and money invested.
The CEO may go to jail for trading on insider information.
You are all looking at it wrong.. Yes the deal to sell the stock was inked months ago. But did they wait to file chapter 11 so that he could sell his stock at a premium??? <-- That is illegal.
You are all looking at it wrong.. Yes the deal to sell the stock was inked months ago. But did they wait to file chapter 11 so that he could sell his stock at a premium??? <-- That is illegal.
I believe GTA made this deal with Apple and was able to make their plant in AZ, but in the interim had interest from other companies for the manufacture of sapphire as well. Now GTA wants to get out of the contract with Apple, so they purposely fail to meet some guidelines which forces Apple to withhold payments. This allows GTA the ability to file for bankruptcy, at least on paper.
I doubt this ploy is really going to work. GTA may be hoping that if it does not, Apple will throw money at them in order to keep things going.
Look, if you do a crappy job of negotiating, and not realizing how much value the product you produce could offer to various markets, they it's your fault and you shouldn't be able to cry over spilled milk. I hope the courts uphold the contract and there are consequences for GTA.
I doubt this ploy is really going to work. GTA may be hoping that if it does not, Apple will throw money at them in order to keep things going.
Look, if you do a crappy job of negotiating, and not realizing how much value the product you produce could offer to various markets, they it's your fault and you shouldn't be able to cry over spilled milk. I hope the courts uphold the contract and there are consequences for GTA.
So that's the problem? GTAT files for bankruptcy because Foxconn couldn't round and polish the edges correctly on these sapphire displays? Who missed that part of the manufacturing process?
If you literally bought a few shares than the cost to trade them is probably more than the value you would receive from the sale! So no reason to sell.
Occam's razor
They filed chapter 11 because they needed to.
Even fewer assumptions (you had 2 I have none)
Probably not. I think, based on what some articles have mentioned is they were planning these for the iPhones (maybe even iPads) and since they sell so many of them and the screen size is much larger, that they needed huge amounts of screens which led to a huge production facility. What I suspect (It might get leaked) is that GTAT might not have been able to meet the quality requirements on the larger screens sizes and therefor Apple simply dropped wanting to use them in favor of another brand/product like Gorilla Glass.
What I don't know is that where Apple was assuming, hoping, or being told that these are supposed to be shatter proof in addition to being scratch proof. PLEASE NOTE that this is PURE speculation on my part.
Obviously, they want something harder than Gorilla Glass 1 and 2 for being scratch resistant, but maybe they wanted shatterproof as well. Or maybe GTAT simply has problems making these things in the larger sizes.
Making crystals for a watch, camera lens and for Fingerprint ID sensors are probably much easier, but they might not need as big of a plant to produce those.
The problem with this scenario is that there is a lot of information that hasn't been released and obviously, GTAT wants certain documents kept private that will give us more of a explanation of what's REALLY going on.
So at this point, most of us are just speculating or making up what we THINK is going on and maybe at some point in time we'll actually find out.
Either way, it sucks for companies to have suppliers that go bankrupt, it sucks to be a company that has to go bankrupt and it sucks that Apple dumped a lot of money in this company and might not see anything in return, as well as the loss of so much cash.
I wonder how much of this was intentional and how much was unintentional.
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That doesn't mean anything. They could still buy the company if needed and spin them off and run as a separate company. I believe that Apple does actually own the furnaces, etc. which are ripping expensive, so maybe Apple might have to buy the company out or simply walk away. The furnaces, unless someone is willing to actually buy them, are now worth scrap metal prices unless they sell off the building to someone else and the furnaces would still be used.
That's the problem. Apple prepaid $400+ Million that was obviously used to build the plants with the equipment.
If Apple planned to use sapphire for iWatch, does it mean they will no longer use it given this scenario? In such a case, will the iWatch be cheaper?
Because the original company who knew about Sapphire production couldn't create good enough product. Why would Apple want to buy it?
There are plenty of other sapphire producers and some that can make screen covers. Apple were just gambling in GTAT and it didn't pay off.
The $400ish Million they spent is 100% tax deductible against R&D costs and that much is like you lending $200 to a mate who might not be able to pay you back.
That sounds like a fair contract to me yet the Apple haters spin it as extortion.
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Except the the CEO of your 'mate' profits by selling off his stock over the course of the hype year to the tune of $10 million.
Sorry, I should have been more specific. I have 1000 shares and wonder if I will be left with $0 or if it might come back a bit.
Just looking for opinions.
Thanks,