If Apple has been ripped off then Tim Cook's job should be on the line. You just don't lose over a half billion dollars and remain in your position unless you're a banker on Wall Street.
With 160+ billion in the bank, I'm sure they'll be just fine. They can probably afford some better consultants than you too. Also just because someone rips you off doesn't make you a bad leader. It would make more sense to keep those who struck the deal accountable for any decisions that may have contributed.
Also, I sick of everyone just blaming leaders for the worlds issues. Get over yourselves.
If Apple was aware, perhaps. And if Apple was not aware, so what.
These sorts of outcomes happen in business all the time, and even in the worst case, this is a trivial one for Apple. You cannot (and US corporate governance and laws do not) hold managers responsible for things that go wrong ex-post. Under the 'business judgment' rule, if it is shown that Apple's managers exercised the appropriate duty of loyalty, duty of care, diligence, etc., there is absolutely no dereliction of fiduciary duties.
I'll bet we learn much more about the story -- including all the benefits that Apple has already got out of this -- in the next few days.
So giving away $500M to a scammer is not a mistake by Cook?
IMO this is 100x worse than Bengate, iOS bugs, ect.
This shows a lack of judgement from Mr Cook. If GTAT scammed him of $1B whats next? Will IBM scam him of $5B? Or Beats scam him of $3B?
I get that you're upset that you personally bet on the wrong horse when you bought GTAT stock, but you're coming across like a crazy person. Apple hasn't lost anything yet. The company they are in business with has gone to court to restructure their debts. That could (probably will) impact Apple negatively, but there is no reason to believe that Apple will lose $500M. And doubling that figure to account makes even less sense. Let this play and we'll see what's what. If the CEO cooked the books and ripped off the company then there will be egg on Apple's face, but it will barely affect Apple's financially. The only materially interesting part of this (unless you're a GTAT investor) is whether this impacts sapphire production such that it delays certain versions of the Apple Watch. At worst, Apple will have to cross off "sapphire" in a few places on their Web site -- for a product not available for order yet -- and write in ion-infused super glass, or whatever.
So giving away $500M to a scammer is not a mistake by Cook?
IMO this is 100x worse than Bengate, iOS bugs, ect.
This shows a lack of judgement from Mr Cook. If GTAT scammed him of $1B whats next? Will IBM scam him of $5B? Or Beats scam him of $3B?
Yeah, and what if the sky were to fall?
What is it about ¢9 per share (worst-case) you have trouble comprehending? That's leaving aside the fact that you have absolutely no clue what Apple has already got in return (not to forget a brilliantly implemented TouchID system).
Unless you know something we don't: in which case, tell us. If not, please do us a favor and shut up about this already.
I personally believe this company got apple bought in think they could in fact make a sapphire phone display and somewhere between the first investment and now Apple figure out it is not going to work and pulled the plug and cut their losses. Notice on this news Apple shares were not adversely effect even thought Apple may had lost $580M because of this.
Well a couple of possible scenarios -
1) Apple said they will need x amount of sapphire - here's $500 mill deposit (ie all the furnaces going like gang busters). Apple never came back with the big order. So sorry!
2) This company said they could produce x amount of sapphire for y amount, and cannot. So sorry!
So how much money do they want US Tax Payers to front while they profit in new accounting classifications while they restructure [fully solvent] as a slightly different entity?
Its the fact that they put their trust in a total BS company. It shows their due dilegance was total CRAP. How can you risk the launch of your next big thing to a CRAP company?
My confidence in Mr Cook is at an all time low right now. My loss in GTAT is insignificant. It was about 2% of my entire portfolio. Now I'm having questions if I should sell my Apple shares which is a much bigger portion of my portfolio (25%)
Talk about a temper tantrum. Its not Cook's fault you got burned betting on the Apple supply chain.
This is the first major blunder Mr Cook has done with Apple.
I am really dissappointed in him. To give a company a zero interest $500M loan and then that said company goes bankrupt. Really bad. Hopefully Apple can minimize the loss from this horrible alliance.
Hard to believe a company like GTAT could trick Apple out of $500M
I hold GTAT shares and the #1 reason was because I trusted Tim Cooks judgement on the company. Why would Cook invest $500M in a crap company? Looks like he got duped just like me. But unlike me Mr Cook had all the inside information.
Sog35, I know you're on Seeking apha, and lately you and I been on the same page on various things Apple,
However, Tim Cook told everyone and including the analysis not to try and piece together what apple is doing by listening to the supply chain, specially rumors. 10 yrs ago you could make lots of money following the apple supply chain and investing in companies that Apple is using, but people go burn on this when Apple flipped directions with no notice. I personally was following this company, and put it in the wait and see category due to too many red flags one being they were running up due to the Apple Supply Chain strategy of investing. Second it just did not seem right. If Corning was loosing the business they would have put out an earning warning since Apple is one of their largest customer for GG3 and they did not, if anything they were activity saying things were good and they would continue getting GG3 orders since sapphire was not ready for prime time.
Apple made an investment, in what they believe will be future technology which may not have pay off, it happens but, but they could end up ahead here depending on what the T&C say with the $500M investment they made.
They cut down the cost, improve the reliability (longivity) and efficiency by replacing a few thick silver conductors with more thin copper traces -- on top of the cell surface.. Copper is cheaper, more flexible -- and the thinner circuits hide less of the solar-collection surface ...
I'm no engineer ... But wouldn't it be even better to put all the conductors on the bottom of the solar panel -- no exposure to the environment -- no hiding of any of the solar collector ...
BTW, I worked for Hoffman Semiconductor in the early 1960's ... They were an early manufacturer of solar cells ...
In fact I bought a Hoffman Portable Solar Transistor Radio-Phonograph. It was about the same width and height as an iPad -- but the thickness of a brick. It actually worked! the back (top) of the case split away from the front. The front held the turntable and the back was the stylus/tonearm. You could actually play 33 RPM records on the thing ...
Stop making excuses. Tim Cook messed up, big time.
You don't just give HALF A BILLION to a company and they end up bankrupt 12 months later. That is NOT business as usual.
Tim Cook messed up. He gave this BS company HALF A BILLION before they even provided Apple a good prototype product.
Of course he did. It's just the benighted people around here who still refuse to see the obvious.
Just like he did with his STUPID dividends decision, which automatically opened the precedent for Apple to turn a growth stock into a MS-like stock.
Just like his IDIOTIC decision to buy Beats, which has neither great headphones nor an "invaluable" streaming service.
But let them care about their stock prices and "doubled" company value; I prefer to care about true innovation and a promising way forward, just like I did when buying Apple devices back in the dark (yet hopeful) 90s...well, at least Jobs was alive in that era.
Got to love all the arm chair CEOs here. They're posting on an Internet rumor site message board while Tim Cook is running the most valuable company in the world. Btw, Apple stock is basically flat today (NASDAQ is slightly down). Clearly Wall Street isn't treating this as some big Tim Cook blunder.
thing is (not sure about chapter 11 or chapter 7 insolvency) but going bankrupt means all contracts are null and void... apple has a huge contract with them, but they loaned them the 560 million... so apple is goimg to be first it line for the company. far all we know, the apple (arizona plan) is a seperate division from GTAT... and perhaps that is not affected...
in any case, Apple gets it's Sapphire and then writes off the loan against apple's income taxes... if so, smart on Apples part, because it is getting "free" sapphire, or at least Sapphire that is tax free... /un-informed-speculation...
Apple did not loan them money. They pre-purchased products. That's the key. Apple is first in line because they are a customer and will continue to receive products as GT is in bankruptcy.. All the upset GTAT stockholders on here (who are dead last in line) don't understand that.
And no, not all contracts are null and void. The court may allow certain contracts to be canceled for the benefit of the creditors.
bought 1000 shares at $1.25 as a high risk trade. This could be very profitable if the problems get solved.
There's huge leverage working for you on your buy if it works out over the longer pull. Otherwise, if you don't mind taking chances with some spare change, there are worse bets made every day in a casino or a race track and the potential payoffs aren't as big. Have fun.
Without much info to go on, we might nevertheless surmise:
1. The product is fundamentally sound.
2. Over time, they'll make and sell a lot of it.
3. Current indications are that management allowed spending to way outrun cash to the point of being completely out of control.
4. Lenders weren't willing to go deeper in the tank if they lost faith in the capabilities of current management.
I'm betting the bankruptcy stems from management ineptitude more than anything. Get a good mechanic to put the wheels back on the buggy and they'll be back in the race.
Comments
yeah, sure. it's the end of the world for the stock holders. The "breather" just cost them everything.
Um... that's the deal with stocks. If you own them, that's part and parcel of the risk you bear.
With 160+ billion in the bank, I'm sure they'll be just fine. They can probably afford some better consultants than you too. Also just because someone rips you off doesn't make you a bad leader. It would make more sense to keep those who struck the deal accountable for any decisions that may have contributed.
Also, I sick of everyone just blaming leaders for the worlds issues. Get over yourselves.
Thanks Anant.
Stop making excuses. Tim Cook messed up, big time.
You don't just give HALF A BILLION to a company and they end up bankrupt 12 months later. That is NOT business as usual.
Tim Cook messed up. He gave this BS company HALF A BILLION before they even provided Apple a good prototype product.
Yelling is not going to change the stupidity of your point.
(Edited typo)
It is a big deal when FRAUD and CRIMINAL ACTIVITY is involved.
The CEO of GTAT sold a ton of shares with knowlege this company was going bankrupt
So, you're a corporate criminal lawyer too, with perfect information and perfect foresight? Calm down. Breathe.
So giving away $500M to a scammer is not a mistake by Cook?
IMO this is 100x worse than Bengate, iOS bugs, ect.
This shows a lack of judgement from Mr Cook. If GTAT scammed him of $1B whats next? Will IBM scam him of $5B? Or Beats scam him of $3B?
I get that you're upset that you personally bet on the wrong horse when you bought GTAT stock, but you're coming across like a crazy person. Apple hasn't lost anything yet. The company they are in business with has gone to court to restructure their debts. That could (probably will) impact Apple negatively, but there is no reason to believe that Apple will lose $500M. And doubling that figure to account makes even less sense. Let this play and we'll see what's what. If the CEO cooked the books and ripped off the company then there will be egg on Apple's face, but it will barely affect Apple's financially. The only materially interesting part of this (unless you're a GTAT investor) is whether this impacts sapphire production such that it delays certain versions of the Apple Watch. At worst, Apple will have to cross off "sapphire" in a few places on their Web site -- for a product not available for order yet -- and write in ion-infused super glass, or whatever.
So giving away $500M to a scammer is not a mistake by Cook?
IMO this is 100x worse than Bengate, iOS bugs, ect.
This shows a lack of judgement from Mr Cook. If GTAT scammed him of $1B whats next? Will IBM scam him of $5B? Or Beats scam him of $3B?
Yeah, and what if the sky were to fall?
What is it about ¢9 per share (worst-case) you have trouble comprehending? That's leaving aside the fact that you have absolutely no clue what Apple has already got in return (not to forget a brilliantly implemented TouchID system).
Unless you know something we don't: in which case, tell us. If not, please do us a favor and shut up about this already.
Nope. Its all Sapphire.
without the last loan payment from Apple they are not solvent.
GTAT put all there eggs in the Apple basket and lost.
"All Sapphire"?
Not actually true, not even close to true. Quite WRONG in point of fact:
http://www.gtat.com/products-and-services-overview.htm
You're welcome.
....
I personally believe this company got apple bought in think they could in fact make a sapphire phone display and somewhere between the first investment and now Apple figure out it is not going to work and pulled the plug and cut their losses. Notice on this news Apple shares were not adversely effect even thought Apple may had lost $580M because of this.
Well a couple of possible scenarios -
1) Apple said they will need x amount of sapphire - here's $500 mill deposit (ie all the furnaces going like gang busters). Apple never came back with the big order. So sorry!
2) This company said they could produce x amount of sapphire for y amount, and cannot. So sorry!
There is not information either way is there?
This is the first major blunder Mr Cook has done with Apple.
I am really dissappointed in him. To give a company a zero interest $500M loan and then that said company goes bankrupt. Really bad. Hopefully Apple can minimize the loss from this horrible alliance.
Hard to believe a company like GTAT could trick Apple out of $500M
I hold GTAT shares and the #1 reason was because I trusted Tim Cooks judgement on the company. Why would Cook invest $500M in a crap company? Looks like he got duped just like me. But unlike me Mr Cook had all the inside information.
Sog35, I know you're on Seeking apha, and lately you and I been on the same page on various things Apple,
However, Tim Cook told everyone and including the analysis not to try and piece together what apple is doing by listening to the supply chain, specially rumors. 10 yrs ago you could make lots of money following the apple supply chain and investing in companies that Apple is using, but people go burn on this when Apple flipped directions with no notice. I personally was following this company, and put it in the wait and see category due to too many red flags one being they were running up due to the Apple Supply Chain strategy of investing. Second it just did not seem right. If Corning was loosing the business they would have put out an earning warning since Apple is one of their largest customer for GG3 and they did not, if anything they were activity saying things were good and they would continue getting GG3 orders since sapphire was not ready for prime time.
Apple made an investment, in what they believe will be future technology which may not have pay off, it happens but, but they could end up ahead here depending on what the T&C say with the $500M investment they made.
SOT:
Social site Pinterest has a new collection featuring the most unpopular members of the web community ...
It's called: Pin-Pricks ...
Let me be the first to nominate @brlawyer for charter membership -- for his specious remarks!
I appreciate the honor - keep it up!
Thank's for the link!
Mmm ... Interesting ...
They cut down the cost, improve the reliability (longivity) and efficiency by replacing a few thick silver conductors with more thin copper traces -- on top of the cell surface.. Copper is cheaper, more flexible -- and the thinner circuits hide less of the solar-collection surface ...
I'm no engineer ... But wouldn't it be even better to put all the conductors on the bottom of the solar panel -- no exposure to the environment -- no hiding of any of the solar collector ...
BTW, I worked for Hoffman Semiconductor in the early 1960's ... They were an early manufacturer of solar cells ...
In fact I bought a Hoffman Portable Solar Transistor Radio-Phonograph. It was about the same width and height as an iPad -- but the thickness of a brick. It actually worked! the back (top) of the case split away from the front. The front held the turntable and the back was the stylus/tonearm. You could actually play 33 RPM records on the thing ...
Surfed in vain -- couldn't find any pics or info
Stop making excuses. Tim Cook messed up, big time.
You don't just give HALF A BILLION to a company and they end up bankrupt 12 months later. That is NOT business as usual.
Tim Cook messed up. He gave this BS company HALF A BILLION before they even provided Apple a good prototype product.
Of course he did. It's just the benighted people around here who still refuse to see the obvious.
Just like he did with his STUPID dividends decision, which automatically opened the precedent for Apple to turn a growth stock into a MS-like stock.
Just like his IDIOTIC decision to buy Beats, which has neither great headphones nor an "invaluable" streaming service.
But let them care about their stock prices and "doubled" company value; I prefer to care about true innovation and a promising way forward, just like I did when buying Apple devices back in the dark (yet hopeful) 90s...well, at least Jobs was alive in that era.
thing is (not sure about chapter 11 or chapter 7 insolvency) but going bankrupt means all contracts are null and void... apple has a huge contract with them, but they loaned them the 560 million... so apple is goimg to be first it line for the company. far all we know, the apple (arizona plan) is a seperate division from GTAT... and perhaps that is not affected...
in any case, Apple gets it's Sapphire and then writes off the loan against apple's income taxes... if so, smart on Apples part, because it is getting "free" sapphire, or at least Sapphire that is tax free... /un-informed-speculation...
Apple did not loan them money. They pre-purchased products. That's the key. Apple is first in line because they are a customer and will continue to receive products as GT is in bankruptcy.. All the upset GTAT stockholders on here (who are dead last in line) don't understand that.
And no, not all contracts are null and void. The court may allow certain contracts to be canceled for the benefit of the creditors.
bought 1000 shares at $1.25 as a high risk trade. This could be very profitable if the problems get solved.
There's huge leverage working for you on your buy if it works out over the longer pull. Otherwise, if you don't mind taking chances with some spare change, there are worse bets made every day in a casino or a race track and the potential payoffs aren't as big. Have fun.
Without much info to go on, we might nevertheless surmise:
1. The product is fundamentally sound.
2. Over time, they'll make and sell a lot of it.
3. Current indications are that management allowed spending to way outrun cash to the point of being completely out of control.
4. Lenders weren't willing to go deeper in the tank if they lost faith in the capabilities of current management.
I'm betting the bankruptcy stems from management ineptitude more than anything. Get a good mechanic to put the wheels back on the buggy and they'll be back in the race.
Apple can buy out their IP and continue manufacturing.