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Oct. 10, 2014, 3:49 PM
- "GT believes that it has many claims against Apple arising out of its business relationship with Apple (AAPL - unchanged)," reads a GT Advanced (GTAT -38.7%) bankruptcy court filing.
- The company has confirmed it's closing down the Mesa, AZ plant where it has been producing sapphire for Apple, and cutting 890 related jobs. GT claims it's losing $1M/day at the operations it plans to close. A hearing on GT's motion for permission to close the plant is set for Oct. 15.
- GT's decision suggests Apple will have to turn to third parties to obtain the sapphire needed for the two Apple Watch models featuring sapphire cover glass. A recent Taiwanese media report stated Apple was aiming to launch the Apple Watch in February, and that supplies are constrained by sapphire output.
- The apparent threat to sue comes as crucial details about GT's bankruptcy filing remain sealed due to a confidentially agreement (almost certainly with Apple) said to carry a penalty of $50M per violation.
- Apple is near breakeven in spite of a 2.2% Nasdaq drop.
Oct. 10, 2014, 12:45 PM
Oct. 10, 2014, 9:07 AM
Oct. 9, 2014, 7:18 PM
- GT Advanced (NASDAQ:GTAT) plans to file a motion seeking authorization to wind down operations at its sapphire manufacturing plants, and has been ordered (.pdf) by bankruptcy judge Henry Boroff to immediately file it. A hearing on the motion is set for 2PM ET on Oct. 15.
- Boroff also orders GT (referred to as "the Debtor") to "provide all such information as shall be reasonably requested to any party in interest and the United States Trustee and, in the Debtor’s sole discretion, to the public press, except that in the event that any such information relates to the details of the Debtors’ business relationship with Apple."
- The order follows a GT request to keep its bankruptcy hearing (with Boroff and Apple) and court documents private. The WSJ says it "inquired about registering a protest over GT’s motion to seal the documents that explain what went wrong between GT and Apple," but didn't receive a response before today's court session.
- GTAT -27.9% AH to $0.93.
Oct. 9, 2014, 12:14 PM
- Squashing hopes that today's hearing would unearth crucial details about GT Advanced's (GTAT +2.3%) Chap. 11 filing, a lawyer representing the company stated a confidentiality agreement prevents it from sharing the cause of its bankruptcy, or its restructuring plan.
- The agreement, said to put GT on the hook for $50M in damages per violation, almost certainly involves Apple, which is famous for demanding airtight secrecy from suppliers.
- A lawyer from the DOJ's bankruptcy watchdog criticized GT's request. "The record is insufficient for the court to find what the court needs to find."
- Prior GT Advanced coverage
Oct. 8, 2014, 12:45 PM
Oct. 8, 2014, 12:04 PM
- Apple (NASDAQ:AAPL), remarking for the first time on GT Advanced's (GTAT +23.1%) bankruptcy filing: "We are focused on preserving jobs in Arizona following GT’s surprising decision and we will continue to work with state and local officials as we consider our next steps."
- The remarks come ahead of tomorrow morning's bankruptcy hearing, which should provide details on the role Apple played in the filing. The WSJ has reported Apple decided to withhold a $139M prepayment due to GT's failure to meet technical milestones.
- GT is currently trading around $1.50. Its market cap is at $153M.
- Prior GT Advanced coverage
Oct. 8, 2014, 9:10 AM
Oct. 7, 2014, 5:00 PM
- A Manchester, NH court will host GT Advanced's (GTAT +51.2%) first bankruptcy hearing at 10AM ET on Thursday.
- The hearing should provide details on the specific role Apple played in GT's Chap. 11 filing, and what claims Apple holds on GT's assets going forward. The WSJ has reported Apple held off on using sapphire cover glass for the iPhone 6 due to technical issues, and that the company is withholding a final $139M prepayment.
- Yesterday: Street tries to make sense of GT Advanced's bankruptcy filing
Oct. 7, 2014, 1:44 PM
- In the wake of GT Advanced's (GTAT +132.5%) bankruptcy filing, the WSJ reports Apple (AAPL -0.2%) chose not to use sapphire cover glass for the iPhone 6 following tests in which sapphire "proved brittle, cracking when phones were dropped from various heights and angles."
- A September Time column noted this potential issue (among others). iPhone Gorilla Glass supplier Corning (GLW -1.1%) must be pleased to see the report.
- The WSJ also reports (not surprisingly) Apple is withholding a final $139M prepayment to GT, which depended on operational targets being hit.
- Susquehanna thinks Apple may take possession of the GT sapphire equipment at Apple's Mesa, AZ facility, given its prepayments ($440M to date) were "structured as secured debt." GT shares are rebounding today, but are still only at $1.85.
- An App Store support page indicates 47% of iOS users are now on iOS 8, up just slightly from 46% as of Sep. 21. Bugs related to mobile connectivity (since fixed) and iCloud Drive could be slowing uptake, as might complaints about Wi-Fi speeds and battery life.
- Digitimes, historically better at reporting on supply chain activity than new product features, reports Apple has two 12.9" iPad prototypes: One is a standard tablet, and the other a 2-in-1 device supporting both iOS and Mac OS.
- Tim Cook famously panned the idea of an integrated tablet/PC. Moreover, iOS and Mac OS currently rely on different CPU architectures - the former uses ARM, and the latter x86.
- Digitimes also reports Apple has boosted iPhone 6 Plus production relative to the iPhone 6, following strong 6 Plus demand. Fiksu's data still shows the iPhone 6 having a 3.8x usage edge over the supply-constrained 6 Plus. However, early Chinese registration data showed a nearly even split between the phones.
Oct. 7, 2014, 12:45 PM
Oct. 6, 2014, 6:09 PM
- "It seems abundantly clear that there was a fundamental, severe breakdown in the relationship between Apple (NASDAQ:AAPL) and GT," says Raymond James' Pavel Molchanov, taking stock of GT Advanced's (NASDAQ:GTAT) bombshell Chap. 11 announcement.
- Molchanov, who downgraded GT to Underperform on Aug. 28, speculates Apple may have "unilaterally opted for a different sapphire supplier for purely business reasons," or that GT's Mesa, AZ plant may have "suffered serious technical defects and was unable to meet the agreed-upon obligations with Apple." He expects GT's equity will most likely prove worthless.
- Gilford Securities Nimal Vallipuram thinks Apple may have requested "prepayment of some loans due to GTAT not meeting performance targets related to sapphire manufacturing." Nonetheless, he doesn't get why "the two companies did not restructure the agreement to buy some time for GTAT."
- Matt Margolis: "It is evident now that GTAT did not meet the required metrics to receive the final prepayment from Apple. In addition, GTAT burned through $248m of cash during the past two months." Back in August, GT said it expected a final $139M prepayment from Apple by the end of October.
- Shares closed today at $0.80. They're at $0.91 AH.
Oct. 6, 2014, 12:46 PM
Oct. 6, 2014, 10:48 AM
Oct. 6, 2014, 10:17 AM
- In a stunning announcement, GT Advanced (NASDAQ:GTAT) says it has "commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire."
- GT had just $85M in cash as of Sep. 29, and is now seeking debtor-in-possession financing. It observes the Nasdaq "may temporarily halt trading in the company's stock pending the receipt of additional information on the company's financial condition."
- No details have been given on what changes occurred to GT's relationship with Apple (if any) to bring about the filing.
- Shares remain halted.
Oct. 6, 2014, 9:42 AM
GT Advanced Technologies is a leading diversified technology company producing advanced materials and innovative crystal growth equipment for the global electronics, solar and LED industries. Our technical innovations accelerate the use of advanced materials, enabling a new generation of... More
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