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Apple's Sapphire Partner GT Advanced Technologies Files for Bankruptcy

xlii said:
Well didn't see this coming...
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Well, when Apple announced that GT missed the Go Date by over 3 weeks leading to a delay and a switch to glass, you should have.

GT should have had more personnel in China where the product finishing took place. Too many errors, too slow, poor communication. Missed date by weeks for a product that is inventoried by the hour?

You won't survive with Apple having such poor logistical processes. Apple tried to source an American made product. Too bad. It will be interesting to see the BS the Apple haters use on this one to blame Apple. :apple:
 
Sapphire has some wonderful benefits regarding clarity and scratch resistance versus glass, but it also can be less flexible than something like gorilla glass. Imagine the impact to "bendgate" with a sapphire screen that cracks under the slightest bend. I can certainly see sapphire being used with the Apple watch, but there are probably a few technical challenges that remain to be solved on larger form factor devices like the iPhone.
 
sputnikv said:
apple could recover their resources if they wanted to
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They will have GT purchase the furnaces back under bankruptcy? :apple:

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calzon65 said:
Sapphire has some wonderful benefits regarding clarity and scratch resistance versus glass, but it also can be less flexible than something like gorilla glass. Imagine the impact to "bendgate" with a sapphire screen that cracks under the slightest bend. I can certainly see sapphire being used with the Apple watch, but there are probably a few technical challenges that remain to be solved on larger form factor devices like the iPhone.
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Very good point. :apple:
 
IJ Reilly said:
I have yet to see a company emerge from Chapter 11 with the stockholders remaining whole, or even close. The nearest I can remember is when K-Mart in Chapter 11 merged with Sears. The stockholders got something (and not much, as I recall) because K-Mart was merging with another public company. A recent example of current stockholders being wiped out in Chapter 11 is GM. A new holding company was formed and new stock sold. You can (I believe) still buy stock in the old GM for pennies, assuming you need wallpaper.
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What you have seen or what you can remember are irrelevant, valueless contributions.

If the company is forced to sell all of its assets to settle liabilities and if all secured and unsecured liabilities cannot be met, which was true with GM, then stockholders will receive nothing. Nobody yet knows if GTAT is capable of raising debtor-in-possession financing to restructure its liabilities, though statements from the company state otherwise - which would be illegal for a company to say if not true, though unforeseen circumstances could change the outlook. IF GTAT raises enough financing to restructure its debt, then the company will return to normal operations and the stock will be listed once more. The uncertainty is what will happen during the bankruptcy proceedings. You are making spurious claims without valid premises. Here is your argument: I remember that most bankruptcies result in stockholders losing all of their money. GTAT filed for bankruptcy. Therefor, the stockholders of GTAT will lose all of their money. As is usual with syllogisms, your major premise is the crux and involves an extremely weak assumption: that what you remember or think you know is valid and applicable to this case.
 
RedDawn said:
Nobody should be taking anything this poster says seriously.

You have demonstrated a misunderstanding of Chapter 11 bankruptcy, debt, equity, stock valuation and more. Debtor-in-possession financing will likely help GTAT restructure its debt, exit bankruptcy, and it will continue operations the whole time. Please refrain from opining on topics such as investment or legal proceedings.

Source: lawyer, investor
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Well, no one should be relying on anonymous posts on a tech forum for investment advice.

In any case, though, I think what he was saying is that typically in a Chapter 11 filing, equity holders are wiped out. Not always, as American Airlines has shown. But in GM's Chapter 11, equity holders were wiped out, and many debt holders took losses. It was the same with Lehman Brothers.

DIP financing is provided to allow the company to continue operations, as the whole point of Chapter 11 is that creditors will maximize their outcome through the company continuing, rather than closing its doors and liquidating. The DIP financing ranks above other unsecured debt.

I haven't read any of the filings, but it's entirely possible that GT simply had a cash crunch because the use of its materials has been delayed, and is using Chapter 11 force restructuring of its debt to delay payments until the anticipated sales wave finally comes in.
 
0815 said:
If that would be the case that Apple wouldn't have fulfilled their part of the contract, they would have to pay lots of money to GT Advanced Technologies for breaking the contract - probably as much as the contract was worth, or even more for damage of reputation (At least that is how those contracts usually work)
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True, but Apple could have protected themselves against this with clauses in the original contract. GT Advanced, expecting things to run smoothly, signs the deal based on the potential ROI and willing to take the risk. (Possible scenario.)
 
I bought 100 shares @ .92 cents, its up to $1.12 so I'm already up 20 bucks. sweet!
 
Originally Posted by Col4bin View Post
So Apple basically has GT Advanced Technologies sign an exclusive agreement that they will only produce saphire for Apple's rumored iPhones and Apple Watches over the next five years at a high volume capacity, thus limiting GT's partnerships with virtually any other potential clients. Then GT suddely files for Chapter 11 bankruptcy due to not enough business continuity/cash flow.

http://investor.gtat.com/releasedeta...leaseID=804195

Did Apple inadvertantly screw their business partner by having them sign this exclusive contract? Should Apple at least explore a possible buyout of this company or at least license the tech?

Mixed feelings about Apple's business practices some times.


Rogifan said:
When did Apple or GT ever disclose they were producing sapphire for the new iPhones displays? I know there were rumors about it but that doesn't mean it for sure was targeted for the iPhone 6.
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Note that I suggested iPhone 6's or Apple Watches. (It could even be future iPad or iMac screen's for that matter?)
 
KPOM said:
Well, no one should be relying on anonymous posts on a tech forum for investment advice.

In any case, though, I think what he was saying is that typically in a Chapter 11 filing, equity holders are wiped out. Not always, as American Airlines has shown. But in GM's Chapter 11, equity holders were wiped out, and many debt holders took losses. It was the same with Lehman Brothers.

DIP financing is provided to allow the company to continue operations, as the whole point of Chapter 11 is that creditors will maximize their outcome through the company continuing, rather than closing its doors and liquidating. The DIP financing ranks above other unsecured debt.

I haven't read any of the filings, but it's entirely possible that GT simply had a cash crunch because the use of its materials has been delayed, and is using Chapter 11 force restructuring of its debt to delay payments until the anticipated sales wave finally comes in.
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Agree with you completely. I was just challenging the blanket statements, without exception, that stockholders' equity is now zero or that they will not be made whole. Nobody knows that, yet. And the company has not intimated or explicitly stated that either.

Here is a link to the filings, I haven't read them either.
 
IJ Reilly said:
Congratulations, you just bought a total loss.
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Not necessarily. Someone who bought American Airlines in the weeks after they filed for Chapter 11 and stayed around until they merged with US Airways made out like bandits.

A lot of smaller banks also used Chapter 11 after the financial crisis to restructure their preferred stock. Equity holders took a hit, but weren't wiped out entirely.

In this person's case, it's about a $400 bet, perhaps with better odds than a night at the poker table.

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tgenius said:
check that, its up to $1.42, I'm already up $50 on my shares. :D
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Be aware that sometimes in Chapter 11 cases the stock price does a "dead cat bounce" because short sellers need to buy shares to close out their positions. GM's stock did this.
 
KPOM said:
Not necessarily. Someone who bought American Airlines in the weeks after they filed for Chapter 11 and stayed around until they merged with US Airways made out like bandits.

A lot of smaller banks also used Chapter 11 after the financial crisis to restructure their preferred stock. Equity holders took a hit, but weren't wiped out entirely.

In this person's case, it's about a $400 bet, perhaps with better odds than a night at the poker table.
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Exactly; I bought my 107 shares with Dividend money for my AAPL stock, so if I lose it, I'm out $100 bucks, but as of right now I'm +50 in 30 mins and all during my lunch break.
 
CarlosQG said:
Man, I can't wait for an iPhone with Sapphire display and Liquidmetal body. Hope both companies still work with Apple in the future.
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What is liquid metal body? I mean I know they bought the company but what are you expecting liquid metal going to do? and how will it be possible in a body of an iPhone? I hope you are just not using 'liquid metal' for the sake of it. :p
 
BornAgainApple said:
I see this as a great, albeit unintended, opportunity for Apple. They can purchase GT for pennies on the dollar when it comes out of chaper 11.
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If you think it's such a certainty that the equity is trading for "pennies on the dollar" you're free to invest your life savings into the common shares right now. What makes you think the equity will be massively underpriced when they come out of chapter 11?
 
The iPhone screens break with little effort ow so their had to have been some other reason Apple bailed on them. I wouldn't want to see GT become another foreign front company for china.
 
0815 said:
How is that Apples fault if that company ******** up? Maybe that company did not deliver what was promised in the deal - or they went for too cheap in that exclusive deal?
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Apple has better lawyers and can request almost any conditions because of it's position ... but it was mostly meant as a joke :)
 
Really strange....

I must say, this is baffling on a number of levels.

This is a public company with a seemingly obvious ability to raise money had they needed it. There are an enormous number of crappy public companies out there, and they always seem to find investors willing to feed them $ in secondary offerings or PIPEs. See, for example, almost the entire biotech sector. If GT needed money to get them our of trouble, they likely would have been able to raise enough just by doing a simple road show and saying "Apple Partnership"....it would have been a done deal. Instead they choose to essentially wipe out equity investors? Doesn't add up.

Perhaps Apple over negotiated here, which put GT in a position where the terms of the contract were going to be so onerous going forward that there was no amount of $ that could save the shareholders. In that case, they may be hoping that the court will likely alter certain terms of the deal. That's the only thing I can think that makes sense here, because this company should have had absolutely no problem raising money in the capital markets. Perhaps this is a move to get Apple to buy them before the terms of the deal are invalidated by the courts.
 
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calzon65 said:
Sapphire has some wonderful benefits regarding clarity and scratch resistance versus glass, but it also can be less flexible than something like gorilla glass. Imagine the impact to "bendgate" with a sapphire screen that cracks under the slightest bend. I can certainly see sapphire being used with the Apple watch, but there are probably a few technical challenges that remain to be solved on larger form factor devices like the iPhone.
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Have you seen this? https://www.youtube.com/watch?v=b7ANcWQEUI8&list=UUBJycsmduvYEL83R_U4JriQ
 
Poor decision

As a result of a series of transactions with a key customer in 2013, the GTAT Group’s sapphire business model shifted from being primarily an equipment manufacturer to also being a sapphire materials manufacturer.
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