Seeking Alpha

GT Advanced Technologies, Inc. (GTATQ)

- OTCPK - Limited
  • Sat, Feb. 7, 3:09 PM
    • "We have developed a new product that will provide sapphire-like scratch resistance while maintaining the legendary toughness and break resistance of Gorilla Glass," Corning (NYSE:GLW) exec James Clappin stated at yesterday's investor meeting. Corning plans to start selling the composite, known for now as Project Phire, later this year.
    • Though Apple (NASDAQ:AAPL) stuck with Gorilla Glass for the iPhone 6 and would-be Apple sapphire supplier GT Advanced (OTCPK:GTATQ) filed for bankruptcy - it's now trying to sell ~2K sapphire furnaces to pay off creditors, with stockholders getting anything left over - there's still strong industry interest in sapphire as a potential smartphone cover glass solution due to its scratch-resistance and thinness; Apple has said it will "continue evaluating" GT's sapphire progress.
    • Meanwhile, Apple Watch and other smartwatches have adopted sapphire cover glass, and sapphire wafer/materials provider Rubicon (NASDAQ:RBCN) recently announced it's working on "scratch-resistant sapphire-coated faceplates for smartphones and larger devices," as part of a broader effort to expand into new markets. Concerns about the material's cost and brittleness remain.
    • Also disclosed by Corning: 1) The Display Technologies (LCD glass) segment is expected to see 2015 earnings growth comparable with 2014 levels. 2) Corning's glass sales related to large-size LCD TVs rose over 50% in 2014 on a unit basis; it forecasts 30%+ growth in large-size LCD viewing area by 2016. 3) The Optical Communications (fiber) business is expected to see high-single digit 2015 growth, aided by strong sales to the last-mile fiber, data center, and distributed antenna markets. (investor day slides)
  • Mon, Feb. 2, 3:51 PM
    • Apple (AAPL +1.2%) plans to spend $2B to turn what used to be GT Advanced's (OTCPK:GTATQ -1.4%) sapphire manufacturing plant (located in Mesa, AZ) into a data center that will serve as a "command center" for its global data center infrastructure.
    • The 1.3M+ sq. foot plant will employ 150 full-time Apple workers, create 300-500 construction/trade jobs, and be powered by renewable energy. While GT owned the furnaces installed within the facility - they're now being sold to pay off GT's debt to Apple, as part of its Chap. 11 restructuring - Apple controls the facility itself.
    • Apple has been on a data center building spree over the last several years. The company has set a $13B FY15 (ends Sep. '15) capex budget, up from FY14's $11B and equal to nearly 6% of its FY15 revenue consensus.
    • Earlier: Apple plans $5B debt offering
  • Dec. 31, 2014, 1:13 PM
    • Declaring the payouts necessary to motivate "the key drivers" of its restructuring, GT Advanced (OTCPK:GTATQ -3%) has asked the court handling its Chap. 11 bankruptcy to sign off on millions in executive bonuses.
    • If the plans are approved, GT expects to pay $2.275M to nine senior execs through a program that could double the salaries of certain execs if targets are hit. It expects to pay $1.4M to 28 other employees who don't qualify as "insiders."
    • For obvious reasons, GT doesn't believe equity bonuses will serve as an effective motivator. Pre-bankruptcy sales by CEO Tom Gutierrez and other execs have received a lot of scrutiny.
    • Shares are at $0.35 on the pink sheets.
    • Previous: GT Advanced's settlement cleared; furnace proceeds in focus
  • Dec. 16, 2014, 6:13 PM
    • Bankruptcy judge Henry Boroff has signed off on GT Advanced's (OTCPK:GTATQ) revised settlement with Apple, through which GT stands to keep an extra ~$50M as it sells off its 2,000 sapphire furnaces to help pay down $439M in claims held by Apple.
    • GT attorney Luc Despins told the court he expects each furnace to sell for at least $500K. Apple will receive $169K/furnace for the first 500 sold, and $224K/furnace for the next 500.
    • Advantage Capital's Irvin Schlussel notes the furnace proceeds will determine how much GT's creditors recover ... and if anything will be left over for stockholders. "If they sell these furnaces for $500,000, then all of a sudden we have a great prospect for full recovery for the bonds."
    • GT rose to $0.49 on the pink sheets today. Its market cap stands at $67.4M.
  • Dec. 16, 2014, 2:17 AM
    • GT Advanced (OTCPK:GTATQ) modified its settlement with former partner Apple yesterday to produce more near-term cash to support its emergence from bankruptcy.
    • The new terms should be worth $50M more than the original settlement, giving GT Advanced four years to sell off the equipment from the abandoned sapphire manufacturing venture to pay down Apple debt.
    • The stock, which now trades over the counter, shot 48% higher on Monday to close at $0.41 per share following the news.
  • Nov. 19, 2014, 1:54 PM
    • A hearing for GT Advanced's (OTCPK:GTATQ +5.6%) settlement hearing with Apple has been postponed to Dec. 10 from Nov. 25, to give more time to investigate possible objections from creditors.
    • Apple's settlement with bankrupt GT gives the company a $439M claim secured by 2K+ sapphire furnaces that GT plans to sell. Nonetheless, Apple has said it will "continue evaluating" GT's sapphire progress.
    • In court docs unsealed earlier this month, GT accused Apple of pursuing "a classic bait-and-switch strategy" that left GT saddled with "an onerous an massively one-sided deal."
  • Oct. 23, 2014, 1:21 PM
    • An Apple spokeswoman: "Apple (NASDAQ:AAPL) put a lot of effort into an ambitious new sapphire manufacturing process with GTAT which is not ready for production. We're going to continue evaluating GTAT's progress on larger sapphire boule development, as well as consider other options for the facility."
    • GT Advanced (OTCPK:GTATQ +49.7%) confirmed this morning it has reached a settlement with Apple (previous) that will result in its Mesa, AZ and Salem, MA sapphire production ops being wound down, and that a portion of its sapphire furnace sales will be used to pay down the company's debt to Apple. 650 Mesa employees have been laid off.
    • GT "retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion, without restrictions."
  • Oct. 21, 2014, 7:21 PM
    • In a deal that GT Advanced (NASDAQ:GTAT) lawyer Luc Despins calls an "amicable parting of the ways," Apple (NASDAQ:AAPL) and GT have agreed to wind down Apple's Mesa, AZ plant, once expected to provide sapphire that would be used to protect millions of Apple device screens..
    • The plant's sapphire furnaces (owned/operated by GT) will be sold - Fortune's Philip Elmer-DeWitt reports 2,039 will be unloaded - and some of the proceeds used to pay down GT's debt to Apple. Apple made $440M worth of prepayments to GT that were structured as secured debt.
    • The deal suggests Apple will be turning to 3rd-party sapphire suppliers to obtain cover glass for the Apple Watch, which is set to ship in early 2015. The regular Apple Watch and the high-end Apple Watch Edition use sapphire cover glass; the Apple Watch Sport doesn't.
    • As part of the deal, GT is seeking to have the original court docs (currently sealed) that explained its bankruptcy filing struck from the public record. However, its lawyers state GT will be able to disclose most of the information that's pertinent to its bankruptcy.
    • Earlier: GT Advanced nears settlement with Apple
  • Oct. 21, 2014, 11:04 AM
    • GT Advanced (GTAT) and Apple "are on the cusp of a consensual global settlement," GT says in a new court filing.
    • Attorney Luc Despins: "We’re optimistic that in the next hour or so we will have a signed settlement agreement with Apple. Optimistic, no guarantees of that." He adds the deal "resolves a lot of the issues before the court" in terms of explaining GT's bankruptcy filing.
    • GT shares are up 101.6% on the pink sheets to $0.73.
    • Last week: GT's bankruptcy hearing delayed
  • Oct. 16, 2014, 9:08 AM
    • The Nasdaq is suspending trading in GT Advanced (NASDAQ:GTAT) as of today's open. Shares will trade on the pink sheets under the symbol GTATQ.
    • The company had warned (when announcing its bankruptcy filing) the Nasdaq "may temporarily halt trading in the company's stock pending the receipt of additional information on the company's financial condition."
    • Yesterday: GT's bankruptcy hearing delayed
  • Oct. 15, 2014, 8:54 PM
    • A hearing over GT Advanced's (NASDAQ:GTAT) request to shut down its sapphire manufacturing ops and keep many details about its Chap. 11 filing sealed that was originally set for today has been pushed back to Oct. 21, the day after Apple's (NASDAQ:AAPL) FQ4 report.
    • GT, Apple, and a committee of creditors agreed to the push-out. Also delayed: A ruling on Apple's objections to GT's attempt to free itself of certain contracts and leases.
    • Nonetheless, the day wasn't without fresh drama. Bankruptcy judge Henry Boroff grilled Apple over its extensive secrecy requests, questioning how much proprietary info was actually included in many of the docs it wants kept private. "I've got a foot-high stack of documents, and it can't be that it all must be sealed."
    • Boroff also provided a colorful analogy for the dispute between Apple and its would-be supplier. "I’m seeing what looks incredibly like a construction suit, where a homeowner says to the contractor, 'It didn't come out the way I wanted to,' and the contractor says, 'Well, it would have come out that way if you didn't continue to change the specifications.'"
    • Previous: GT suggests it could sue Apple
  • 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
    | Comment!
  • Oct. 10, 2014, 9:07 AM
    | Comment!
  • 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
Visit Seeking Alpha's
GTATQ vs. ETF Alternatives
Company Description
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