This is all looking a lot more straightforward now.
GT Advanced executives made a gamble with known risks and payoffs. They took a half-billion dollar loan (which is a heck of a lot of money) that had harsh requirements attached to it, with the potential payoff--if their technology managed to live up to the expectations in the timeframe promised--of selling fabulous amounts of sapphire to Apple. Big risk--if they can't meet the promises, they have no backup buyer and Apple can pull the rug out from under them--but huge payoff if they succeeded.
So the execs knew exactly what they were getting in to, and went for it. You can argue whether this was a good idea or not, but they decided the risk was worth it. Who knows, if I was confident enough in my technology I might have, too.
Then halfway through, things started to go south, and they were having trouble meeting their promises. The executives at that point clearly decided it was time to cash in and all started filing to sell stock--rather obviously hoping that the sales would go through before the price crashed. Which many did, and they got a hefty payoff.
Then, after dragging it out a while longer (and getting a personal payoff, at least partly), they decide that they don't like where their gamble has taken them, so they try to bail on it by declaring Chapter 11 so they can kill the whole deal without having to follow through on it. From a shrewd business standpoint, it makes sense--you take a gamble, and when you're clearly losing, you figure out a way to flip the table and walk away from the game. In this case, with a fair amount of money in your own pocket.
Apple is a harsh partner in all this, sure--I probably would be too if I was putting up a half-billion dollar loan on unproven technology. It does not, however, make the GTA executives look very good--they took a deal knowing full well what it entailed, then when their technology failed to deliver they personally cashed in and completely dumped both the partnership and the workers they'd set up in an effort to try and keep the remainder of the business on their own terms.
The only questions are whether they actually knew that their technology was never going to cut it a year ago and just drug it out to keep the stock value up until some sales went through, or whether their decision that they definitely couldn't hack it and had no choice but to bail came much later.
GT Advanced executives made a gamble with known risks and payoffs. They took a half-billion dollar loan (which is a heck of a lot of money) that had harsh requirements attached to it, with the potential payoff--if their technology managed to live up to the expectations in the timeframe promised--of selling fabulous amounts of sapphire to Apple. Big risk--if they can't meet the promises, they have no backup buyer and Apple can pull the rug out from under them--but huge payoff if they succeeded.
So the execs knew exactly what they were getting in to, and went for it. You can argue whether this was a good idea or not, but they decided the risk was worth it. Who knows, if I was confident enough in my technology I might have, too.
Then halfway through, things started to go south, and they were having trouble meeting their promises. The executives at that point clearly decided it was time to cash in and all started filing to sell stock--rather obviously hoping that the sales would go through before the price crashed. Which many did, and they got a hefty payoff.
Then, after dragging it out a while longer (and getting a personal payoff, at least partly), they decide that they don't like where their gamble has taken them, so they try to bail on it by declaring Chapter 11 so they can kill the whole deal without having to follow through on it. From a shrewd business standpoint, it makes sense--you take a gamble, and when you're clearly losing, you figure out a way to flip the table and walk away from the game. In this case, with a fair amount of money in your own pocket.
Apple is a harsh partner in all this, sure--I probably would be too if I was putting up a half-billion dollar loan on unproven technology. It does not, however, make the GTA executives look very good--they took a deal knowing full well what it entailed, then when their technology failed to deliver they personally cashed in and completely dumped both the partnership and the workers they'd set up in an effort to try and keep the remainder of the business on their own terms.
The only questions are whether they actually knew that their technology was never going to cut it a year ago and just drug it out to keep the stock value up until some sales went through, or whether their decision that they definitely couldn't hack it and had no choice but to bail came much later.
