This is the first time in more than 15 years that Apple buys something FOR ITS ALLEGED COOLNESS, instead of integrating whatever purchase into Apple's own BRAND. This in itself is a sign of cracks to come.
It would be such a sign if it weren't premature to say so. There has been much chatter in the news that Apple does, in fact, plan on rolling the Beats streaming music capabilities into Apple's services and shutting down the brand, which would be consistent with how they have always operated and how you are saying they should continue operating. It certainly doesn't make sense to shut down the Beats music service BEFORE you are ready to host those customers in iTunes radio, or whatever Apple branded thing it will become. I think you should have enough patience to find out where this is headed before you lay down judgment. Same with "Sog" with respect to this GTAT thing. He has really jumped the gun with his ranting.
As far as the "Beats headphones are concerned, I suspect that Apple views them only as a revenue bonus as opposed to the real meat of the deal, so they might as well just let those things keep getting sold under the brand that is working so well. If the headphones were a central part of the strategy, then I think I would be concerned like you are, but I don't really believe that they are.
It would be such a sign if it weren't premature to say so. There has been much chatter in the news that Apple does, in fact, plan on rolling the Beats streaming music capabilities into Apple's services and shutting down the brand, which would be consistent with how they have always operated and how you are saying they should continue operating. It certainly doesn't make sense to shut down the Beats music service BEFORE you are ready to host those customers in iTunes radio, or whatever Apple branded thing it will become. I think you should have enough patience to find out where this is headed before you lay down judgment. Same with "Sog" with respect to this GTAT thing. He has really jumped the gun with his ranting.
As far as the "Beats headphones are concerned, I suspect that Apple views them only as a revenue bonus as opposed to the real meat of the deal, so they might as well just let those things keep getting sold under the brand that is working so well. If the headphones were a central part of the strategy, then I think I would be concerned like you are, but I don't really believe that they are.
Good points above; but the interesting irony is that, after hearing the rumor about Beats' streaming service shutdown, virtually EVERYONE here then proceeded to say that Apple's core reason for this investment was in their headphones...so which one is it?
agreed. luckily I've demonstrated no hubris -- i readily admit my opinions on apple are quite worthless, as they're basely solely on rumors read on rumor sites. i would never exhibit the hubris required to suggest i know what I'm talking about or am in a better position of knowledge than the true businessmen running the company and making the decisions we only get to read a small part about.
you don't seem able to distinguish that.
but, you've been buying apple stuff for a "long time" -- thats gotta be worth something, right?
It would be such a sign if it weren't premature to say so. There has been much chatter in the news that Apple does, in fact, plan on rolling the Beats streaming music capabilities into Apple's services and shutting down the brand, which would be consistent with how they have always operated and how you are saying they should continue operating. It certainly doesn't make sense to shut down the Beats music service BEFORE you are ready to host those customers in iTunes radio, or whatever Apple branded thing it will become. I think you should have enough patience to find out where this is headed before you lay down judgment. Same with "Sog" with respect to this GTAT thing. He has really jumped the gun with his ranting.
As far as the "Beats headphones are concerned, I suspect that Apple views them only as a revenue bonus as opposed to the real meat of the deal, so they might as well just let those things keep getting sold under the brand that is working so well. If the headphones were a central part of the strategy, then I think I would be concerned like you are, but I don't really believe that they are.
I think its quite clear Apple didn't buy Beats for the headphones but the headphone brand is popular and makes money so it would be stupid to rebrand it at this time.
geeze, you people. beats -- does a billion in sales w/ high-margin gear and has the mindshare of a young, hip market share. hmm sounds familiar...
Once more, you miss the basic point here:
This is the first time in more than 15 years that Apple buys something FOR ITS ALLEGED COOLNESS, instead of integrating whatever purchase into Apple's own BRAND. This in itself is a sign of cracks to come.
Mmm ...
In June 2005, Apple bought a company called Fingerworks -- for its tech, IP and talent ...
Two years later, June 2007, Steve Jobs demoed that tech as MultiTouch on the iPhone ...
In May 2014, Apple bought a company called Beats -- for their tech, IP, Products, Services, and talent ...
Instant gratification aside (less than 6 months) -- Beats is a profitable business -- giving Apple some immediate ROI.
But the big thing that Beats brings to Apple is the position of music-industry insiders -- the talent, the experience, the reputation, the trust ... It takes many years to build that position.
There are some rumors that Beats infrastructure is primed and poised to change the Music industry as we know it -- from artist to consumer ... possibly disrupting/disintermediating the status quo ...
If nothing else, it gives Eddy Cue some fantastic bargaining power when talking to the music publishers and distributors.
Let's give it a year or two to play out -- I think it'll be a winner!
Good points above; but the interesting irony is that, after hearing the rumor about Beats' streaming service shutdown, virtually EVERYONE here then proceeded to say that Apple's core reason for this investment was in their headphones...so which one is it?
Well I wouldn't have expected most people on here to claim the headphones were the core of that deal as opposed to, say, Iovine & Dr. Dre's influence with content providers (which seems to be the main hurdle to overcome with respect to Apple's plans for the living room). Or the fancy music curation capability of Beats streaming music (which Tim Cook has raved about). I could definitely see Apple trying to integrate such a thing into iTunes Radio, which really doesn't have a very strong method for making "stations".
But then again, I wasn't party to those threads, and I have observed some people here to be wishy-washy now and then just to win an argument. So let's forget about them. Between you and me, I think it is way too early to judge the Beats deal. Tim Cook has proven many times that he, like Steve, is willing to develop plans for years before revealing the fruit. (And don't even get me started on Sog's childish tantrum about GTAT, without any knowledge whatsoever of the terms of that deal.)
I also considered invensense but I havent bothered pulling any money out of apple for these companies.
I do wonder what this means for apple and how this company was allowed to do chapter 11 and why it was felt they couldnt pay their customers and creditors.
Knowing what they did, the company still gambled on expansions... With other people's money.
I would HATE to be a customer of a any company that simply took all my money and got away without providing goods/services. It is THEFT pure and simple. Why do common thieves get arrested and get a criminal record while corporations can "restructure" and default on debts.
I started seeing those cracks when the awful Beats deal was announced - not even for financial reasons (although its "advantages" are null, to say the least); but just because, for the first time in 15 years or so, Apple went after something else considered "cool", when Apple ITSELF has always been the epitome of cool and innovative.
And let's not even talk about quality of service issues or the ridiculous, unacceptably botched streaming of the last event...this alone should have raised concerns in sane Apple-loving people.
I love that. "Let's not even talk about..." and then talk about it anyway. Personally I'm now (in the spirit of brlawyer and sog35 who, because they have been buying Apple products for a long time are omniscient) 100% certain that the scammy scam artist running that scammy GTAT company is responsible for the poor streaming experience at the big incredibly successful latest Apple event. Tim Cook spent hundreds of millions of dollars (call it $2.5 billion when you factor in the overhead) to stream that event based solely on the technical advice of the scamster from GTAT.
Ha!
I can remember when Apple hired Trip Hawkins in the early 1980s ...
For those not paying attention Trip is accused of buying airplanes and houses as CEO of EA -- and hiding millions in taxes from the IRS ...
Mmm ...
Trip Hawkins ... Apple ... Bad investment/tax decisions ...
I'm sure that Tim cook is somehow responsible for this!
Sorry but HALF A BILLION is not fine. When you add in opportunity cost this will probably close to ONE BILLION.
When your CEO gives a company ONE BILLION DOLLARS and they go bankrupt less than 12 months later it falls on the CEO.
Sorry, TIM COOK fuked up. Read my post history. I've been a strong supporter of Cook. But facts are facts. And MR COOK just got duped out of HALF BILLION.
Agreed, as an apple shareholder, i want to know WHERE THE HALF BILLION WENT?! Did apple just lose a chunk of that that the put down as a "down payment?"
No ceo can know everything about everything... So how culpable is cook in this I really dont know... But it really is a lot of money on the hook.
its called opportunity cost.
<span style="line-height:1.4em;"> </span>
Most people here have no idea what "opportunity cost" means; so good luck trying to convince them.
Me please, me please!!!!!! It's like the foregone time I could have gainfully spent picking my nose with my eyes closed instead of reading your posts...
@anant -- ya' gotta' learn to pick n' peruse at the same time
I also considered invensense but I havent bothered pulling any money out of apple for these companies.
I do wonder what this means for apple and how this company was allowed to do chapter 11 and why it was felt they couldnt pay their customers and creditors.
Knowing what they did, the company still gambled on expansions... With other people's money.
I would HATE to be a customer of a any company that simply took all my money and got away without providing goods/services. It is THEFT pure and simple. Why do common thieves get arrested and get a criminal record while corporations can "restructure" and default on debts.
Individuals can default on debts and then take bankruptcy.
$570M may not seem much for a company with $150B in cash but they can't just throw money away.
Did Apple force GTAT into bankruptcy?
Will they get their $570M back?
As an Apple shareholder I deserve answers.
Some of you are acting like $570M is nothing. So if Apple gave $570M to Tim Cooks brother you would be okay with that? ITs not just the amount it the principle.
Read the 10-K that comes out after this month's earnings report, and you'll most likely get the answers you seek. Apple is nowhere near to having a cash flow problem, so you can wait until then. Meanwhile, chill out. My hunch is that once all of the details are known, you will look pretty silly with all of your knee-jerking today.
So giving away $500M to a scammer is not a mistake by Cook?
...and in the end Apple will own the production plant in case GT Advanced cannot be profitable. They got the money for building a plant on Apple property but they own the equipment inside the production plant. Naturally this equipment is also collateral against the loan from Apple. Ever wondered why it was built on Apple owned property? Yep, because of the involved risk of GT Advanced not existing anymore in the long run.
Now what happens if you can't pay the loan back? You make a deal. In this case, the equipment inside the plant goes to Apple, they take over some engineers and sadly managers and produce the glass themselves. The plant was build for Apple anyway. GT Advanced was the operator hoping to be profitable and paying off the loan to Apple from profits made with Apple.
This is exactly how such deal work since forever...
So in the end GT Advanced built Apple a production plant, got cash for doing so in the hope they could survive by producing fast with a good yield and they couldn't. So Apple comes now in and takes what they paid for anyway.
But only in case chapter 11 doesn't save them to get profitable again. Chapter 11 allows struggling companies a lot of more possibilities then normal operation because bankruptcy is on the horizon. But it rarely works out as companies file for chapter 11 way too late (even though still early enough in legal terms).
Seems like a legit business deal to me. And not an unusual one. You give money to a struggling company, this company gets a chance, if it fails not your problem. You cherry pick the left overs during chapter 11 negotiations, which is probably the intention here. This happens all the time with small companies. This is only news because Apple is involved.
Regarding selling shares:. CEOs of public companies cannot sell shares as they like. They have to file for it a long time in advance. And as most CEOs get a lot of options instead of cash they sell them as soon as they can (they usually need to hold them for several years as well). So nothing fishy here. Not all CEOs are millionaires. The CEO here executed is options then sold the shares in according with the SEC guidelines.
For other stuff, like giving good guidance and stuff could be different. But you didn't know what exactly happened internally. If the CEO has a huge short position on GT Advanced over someone else, then there is a legal problem and we can talk scam.
Yeah, this smells fishy. But in fact it is not. Expectations they can produce as planned a month ago is enough for good guidance. They do not tell share holders "Well, it's a 50:50 gamble, we either make it or file chapter 11 next month", because saying such would bring a CEO into huge legal trouble.
And 50:50 are good chances, in fact very good chances, even lower are good. Most public traded start-ups work on way lower chances, only difference there is that they get regular cash infusions. They'd go broke as soon as this cash influx stops, which can be any time. But still they issue good guidance because everything is working out as planned so far. Guidance is the expectation a company has. Nothing more, nothing less.
And he had to give good outlook also because Apple was to unveil their new products. If they filed for Chapter 11 before that there could be even more legal ramifications with impact on Apple shares which of course both parties don't want. This is a huge problem.
I am sure lawyers (probably on both sides) made sure everything was worded properly. And of course if you cannot make it you talk to your biggest creditor before filing for chapter 11. In this case Apple. And they planned out how it will be done in a professional manner.
But remember for smaller companies things can look dim from one month to another. You would be surprised how many even larger companies are on the edge of bankruptcy every other months if they cannot produce.
But in the the end the CEO just kept the company alive as long as he could. Now it's too dim, so chapter 11, try to restructure, sell stuff and get some breathing room. If this fails chapter 7. Basically the CEO delayed chapter 11 as long as he legally could as there was hope on the horizon.
I am not a big fan of Cook, but in this case it was a normal business decision with the only risk of delayed production in every case. I call that a sound deal.
So moving on, business as usual in the business world....
Apple was not satisfied with GTAT's progress so they demanded that GTAT pay the entire loan ( $570M) right away.
GTAT would insolvent if they had to pay the entire loan.
Basically Apple forced GTAT into bankruptcy.
Basically Apple is going to cause a ton of people in GTAT to be unemployeed.
I lost a couple thousand on this which is okay with me. Going in I knew it was a high risk/high reward play. Its just too bad Apple could not find a better way to settle this instead of forcing bankruptcy. would it really hurt Apple to wait a few more months for GTAT to get their sheet together? Did Apple really need the $570M now?
Apple must have been really pissed at GTAT to pull the plug. Either the iPhone6 suppose to have Sapphire screen or the Watch suppose to come out this year. I see no other reason why Apple would demand payment immediately.
Looks to me like Apple got about $250 M from GTAT sometime between June and now. (Check the GTAT financial statements, readily available.)
GTAT most likely didn't live up to their agreements with regard to volume and quality yield. Perhaps it was even apparent that they never would, so Apple demanded repayment, which is the right thing to do under those circumstances. This is business. It seems to me that GTAT made promises that it couldn't deliver on, and Apple was prepared with a clause in the contract. Quite the opposite from your earlier rants, so blame GTAT not Cook.
$570M may not seem much for a company with $150B in cash but they can't just throw money away.
Did Apple force GTAT into bankruptcy?
Will they get their $570M back?
As an Apple shareholder I deserve answers.
Some of you are acting like $570M is nothing. So if Apple gave $570M to Tim Cooks brother you would be okay with that? ITs not just the amount it the principle.
You're so full of shit. Apple doesn't need to "come clean" to you, or anyone. Also, your post is filled with 50 assumptions you pulled out of your ass. Also, you clearly have little insight into Cook if you believe he's in the business of "throwing money away. No, as an Apple shareholder you don't "deserve answers" about every single aspect of Apple's internal business. Did AAPL see a massive drop today, or something? Why are you pretending to be so butthurt? Oh right, cause you need to follow your anti-Apple script.
Spoken truly like the whiny, entitled, spoiled, unbalanced troll you've repeatedly shown yourself to be. Incredible how you haven't given Apple, or Cook a word of credit in the past few years for any of their successes. That's how you spot a troll- they ignore all the inconvenient facts, and pick and choose the ones that fit their negative agenda. You lack any kind of critical thinking, perspective, or objectivity. Not to mention the fact that you have the hubris to pretend you're smarter than everyone who works at Apple.
so you would be okay if Apple paid Tim Cooks brother $570M for doing nothing?
Because that's exactly what GTAT did for Apple. Its a small amount relative to Apple but as an Apple investor i want answers.
Looks to me like Apple got back about $250M recently (see the GTAT financials, please) and possibly took ownership of some equipment that GTAT purchased with the money, which was placed in an Apple-owned facility. Apple's 10-K, due later this month, will shed some light. This is very different from just tossing $570M to Tim Cook's brother, but -hey - if it makes you feel better to make that argument, then knock yourself out.
wait. you're a partner with Apple. iPhone 6 is the fastest selling phone in history, ?Watch is coming and Touch ID will be in every Apple product soon...
wait. you're a partner with Apple. iPhone 6 is the fastest selling phone in history, ?Watch is coming and Touch ID will be in every Apple product soon...
HOW THE F*** DOES THIS HAPPEN?!!?
You purchase enough Sapphire-making equipment to double the world's current annual output and tell Apple you can manufacture enough to put sapphire covers on the world's best smart-phones. But then your process gives terrible yield and Apple has to resort to plan B (Gorilla Glass 3) which, of course, they were ready for.
Comments
Once more, you miss the basic point here:
This is the first time in more than 15 years that Apple buys something FOR ITS ALLEGED COOLNESS, instead of integrating whatever purchase into Apple's own BRAND. This in itself is a sign of cracks to come.
It would be such a sign if it weren't premature to say so. There has been much chatter in the news that Apple does, in fact, plan on rolling the Beats streaming music capabilities into Apple's services and shutting down the brand, which would be consistent with how they have always operated and how you are saying they should continue operating. It certainly doesn't make sense to shut down the Beats music service BEFORE you are ready to host those customers in iTunes radio, or whatever Apple branded thing it will become. I think you should have enough patience to find out where this is headed before you lay down judgment. Same with "Sog" with respect to this GTAT thing. He has really jumped the gun with his ranting.
As far as the "Beats headphones are concerned, I suspect that Apple views them only as a revenue bonus as opposed to the real meat of the deal, so they might as well just let those things keep getting sold under the brand that is working so well. If the headphones were a central part of the strategy, then I think I would be concerned like you are, but I don't really believe that they are.
It would be such a sign if it weren't premature to say so. There has been much chatter in the news that Apple does, in fact, plan on rolling the Beats streaming music capabilities into Apple's services and shutting down the brand, which would be consistent with how they have always operated and how you are saying they should continue operating. It certainly doesn't make sense to shut down the Beats music service BEFORE you are ready to host those customers in iTunes radio, or whatever Apple branded thing it will become. I think you should have enough patience to find out where this is headed before you lay down judgment. Same with "Sog" with respect to this GTAT thing. He has really jumped the gun with his ranting.
As far as the "Beats headphones are concerned, I suspect that Apple views them only as a revenue bonus as opposed to the real meat of the deal, so they might as well just let those things keep getting sold under the brand that is working so well. If the headphones were a central part of the strategy, then I think I would be concerned like you are, but I don't really believe that they are.
Good points above; but the interesting irony is that, after hearing the rumor about Beats' streaming service shutdown, virtually EVERYONE here then proceeded to say that Apple's core reason for this investment was in their headphones...so which one is it?
Hubris has no age.
agreed. luckily I've demonstrated no hubris -- i readily admit my opinions on apple are quite worthless, as they're basely solely on rumors read on rumor sites. i would never exhibit the hubris required to suggest i know what I'm talking about or am in a better position of knowledge than the true businessmen running the company and making the decisions we only get to read a small part about.
you don't seem able to distinguish that.
but, you've been buying apple stuff for a "long time" -- thats gotta be worth something, right?
I think its quite clear Apple didn't buy Beats for the headphones but the headphone brand is popular and makes money so it would be stupid to rebrand it at this time.
John Gruber has an amusing take on the events:
http://daringfireball.net/linked/2014/10/06/gt-advanced
Mmm ...
In June 2005, Apple bought a company called Fingerworks -- for its tech, IP and talent ...
Two years later, June 2007, Steve Jobs demoed that tech as MultiTouch on the iPhone ...
In May 2014, Apple bought a company called Beats -- for their tech, IP, Products, Services, and talent ...
Instant gratification aside (less than 6 months) -- Beats is a profitable business -- giving Apple some immediate ROI.
But the big thing that Beats brings to Apple is the position of music-industry insiders -- the talent, the experience, the reputation, the trust ... It takes many years to build that position.
There are some rumors that Beats infrastructure is primed and poised to change the Music industry as we know it -- from artist to consumer ... possibly disrupting/disintermediating the status quo ...
If nothing else, it gives Eddy Cue some fantastic bargaining power when talking to the music publishers and distributors.
Let's give it a year or two to play out -- I think it'll be a winner!
Good points above; but the interesting irony is that, after hearing the rumor about Beats' streaming service shutdown, virtually EVERYONE here then proceeded to say that Apple's core reason for this investment was in their headphones...so which one is it?
Well I wouldn't have expected most people on here to claim the headphones were the core of that deal as opposed to, say, Iovine & Dr. Dre's influence with content providers (which seems to be the main hurdle to overcome with respect to Apple's plans for the living room). Or the fancy music curation capability of Beats streaming music (which Tim Cook has raved about). I could definitely see Apple trying to integrate such a thing into iTunes Radio, which really doesn't have a very strong method for making "stations".
But then again, I wasn't party to those threads, and I have observed some people here to be wishy-washy now and then just to win an argument. So let's forget about them. Between you and me, I think it is way too early to judge the Beats deal. Tim Cook has proven many times that he, like Steve, is willing to develop plans for years before revealing the fruit. (And don't even get me started on Sog's childish tantrum about GTAT, without any knowledge whatsoever of the terms of that deal.)
I also considered invensense but I havent bothered pulling any money out of apple for these companies.
I do wonder what this means for apple and how this company was allowed to do chapter 11 and why it was felt they couldnt pay their customers and creditors.
Knowing what they did, the company still gambled on expansions... With other people's money.
I would HATE to be a customer of a any company that simply took all my money and got away without providing goods/services. It is THEFT pure and simple. Why do common thieves get arrested and get a criminal record while corporations can "restructure" and default on debts.
Ha!
I can remember when Apple hired Trip Hawkins in the early 1980s ...
For those not paying attention Trip is accused of buying airplanes and houses as CEO of EA -- and hiding millions in taxes from the IRS ...
Mmm ...
Trip Hawkins ... Apple ... Bad investment/tax decisions ...
I'm sure that Tim cook is somehow responsible for this!
Agreed, as an apple shareholder, i want to know WHERE THE HALF BILLION WENT?! Did apple just lose a chunk of that that the put down as a "down payment?"
No ceo can know everything about everything... So how culpable is cook in this I really dont know... But it really is a lot of money on the hook.
@anant -- ya' gotta' learn to pick n' peruse at the same time
I didnt buy GT, while I did consider it.
I also considered invensense but I havent bothered pulling any money out of apple for these companies.
I do wonder what this means for apple and how this company was allowed to do chapter 11 and why it was felt they couldnt pay their customers and creditors.
Knowing what they did, the company still gambled on expansions... With other people's money.
I would HATE to be a customer of a any company that simply took all my money and got away without providing goods/services. It is THEFT pure and simple. Why do common thieves get arrested and get a criminal record while corporations can "restructure" and default on debts.
Individuals can default on debts and then take bankruptcy.
Apple needs to come clean on this.
$570M may not seem much for a company with $150B in cash but they can't just throw money away.
Did Apple force GTAT into bankruptcy?
Will they get their $570M back?
As an Apple shareholder I deserve answers.
Some of you are acting like $570M is nothing. So if Apple gave $570M to Tim Cooks brother you would be okay with that? ITs not just the amount it the principle.
Read the 10-K that comes out after this month's earnings report, and you'll most likely get the answers you seek. Apple is nowhere near to having a cash flow problem, so you can wait until then. Meanwhile, chill out. My hunch is that once all of the details are known, you will look pretty silly with all of your knee-jerking today.
So giving away $500M to a scammer is not a mistake by Cook?
...and in the end Apple will own the production plant in case GT Advanced cannot be profitable. They got the money for building a plant on Apple property but they own the equipment inside the production plant. Naturally this equipment is also collateral against the loan from Apple. Ever wondered why it was built on Apple owned property? Yep, because of the involved risk of GT Advanced not existing anymore in the long run.
Now what happens if you can't pay the loan back? You make a deal. In this case, the equipment inside the plant goes to Apple, they take over some engineers and sadly managers and produce the glass themselves. The plant was build for Apple anyway. GT Advanced was the operator hoping to be profitable and paying off the loan to Apple from profits made with Apple.
This is exactly how such deal work since forever...
So in the end GT Advanced built Apple a production plant, got cash for doing so in the hope they could survive by producing fast with a good yield and they couldn't. So Apple comes now in and takes what they paid for anyway.
But only in case chapter 11 doesn't save them to get profitable again. Chapter 11 allows struggling companies a lot of more possibilities then normal operation because bankruptcy is on the horizon. But it rarely works out as companies file for chapter 11 way too late (even though still early enough in legal terms).
Seems like a legit business deal to me. And not an unusual one. You give money to a struggling company, this company gets a chance, if it fails not your problem. You cherry pick the left overs during chapter 11 negotiations, which is probably the intention here. This happens all the time with small companies. This is only news because Apple is involved.
Regarding selling shares:. CEOs of public companies cannot sell shares as they like. They have to file for it a long time in advance. And as most CEOs get a lot of options instead of cash they sell them as soon as they can (they usually need to hold them for several years as well). So nothing fishy here. Not all CEOs are millionaires. The CEO here executed is options then sold the shares in according with the SEC guidelines.
For other stuff, like giving good guidance and stuff could be different. But you didn't know what exactly happened internally. If the CEO has a huge short position on GT Advanced over someone else, then there is a legal problem and we can talk scam.
Yeah, this smells fishy. But in fact it is not. Expectations they can produce as planned a month ago is enough for good guidance. They do not tell share holders "Well, it's a 50:50 gamble, we either make it or file chapter 11 next month", because saying such would bring a CEO into huge legal trouble.
And 50:50 are good chances, in fact very good chances, even lower are good. Most public traded start-ups work on way lower chances, only difference there is that they get regular cash infusions. They'd go broke as soon as this cash influx stops, which can be any time. But still they issue good guidance because everything is working out as planned so far. Guidance is the expectation a company has. Nothing more, nothing less.
And he had to give good outlook also because Apple was to unveil their new products. If they filed for Chapter 11 before that there could be even more legal ramifications with impact on Apple shares which of course both parties don't want. This is a huge problem.
I am sure lawyers (probably on both sides) made sure everything was worded properly. And of course if you cannot make it you talk to your biggest creditor before filing for chapter 11. In this case Apple. And they planned out how it will be done in a professional manner.
But remember for smaller companies things can look dim from one month to another. You would be surprised how many even larger companies are on the edge of bankruptcy every other months if they cannot produce.
But in the the end the CEO just kept the company alive as long as he could. Now it's too dim, so chapter 11, try to restructure, sell stuff and get some breathing room. If this fails chapter 7. Basically the CEO delayed chapter 11 as long as he legally could as there was hope on the horizon.
I am not a big fan of Cook, but in this case it was a normal business decision with the only risk of delayed production in every case. I call that a sound deal.
So moving on, business as usual in the business world....
I think this is what happenned.
Apple was not satisfied with GTAT's progress so they demanded that GTAT pay the entire loan ( $570M) right away.
GTAT would insolvent if they had to pay the entire loan.
Basically Apple forced GTAT into bankruptcy.
Basically Apple is going to cause a ton of people in GTAT to be unemployeed.
I lost a couple thousand on this which is okay with me. Going in I knew it was a high risk/high reward play. Its just too bad Apple could not find a better way to settle this instead of forcing bankruptcy. would it really hurt Apple to wait a few more months for GTAT to get their sheet together? Did Apple really need the $570M now?
Apple must have been really pissed at GTAT to pull the plug. Either the iPhone6 suppose to have Sapphire screen or the Watch suppose to come out this year. I see no other reason why Apple would demand payment immediately.
Looks to me like Apple got about $250 M from GTAT sometime between June and now. (Check the GTAT financial statements, readily available.)
GTAT most likely didn't live up to their agreements with regard to volume and quality yield. Perhaps it was even apparent that they never would, so Apple demanded repayment, which is the right thing to do under those circumstances. This is business. It seems to me that GTAT made promises that it couldn't deliver on, and Apple was prepared with a clause in the contract. Quite the opposite from your earlier rants, so blame GTAT not Cook.
Apple needs to come clean on this.
$570M may not seem much for a company with $150B in cash but they can't just throw money away.
Did Apple force GTAT into bankruptcy?
Will they get their $570M back?
As an Apple shareholder I deserve answers.
Some of you are acting like $570M is nothing. So if Apple gave $570M to Tim Cooks brother you would be okay with that? ITs not just the amount it the principle.
You're so full of shit. Apple doesn't need to "come clean" to you, or anyone. Also, your post is filled with 50 assumptions you pulled out of your ass. Also, you clearly have little insight into Cook if you believe he's in the business of "throwing money away. No, as an Apple shareholder you don't "deserve answers" about every single aspect of Apple's internal business. Did AAPL see a massive drop today, or something? Why are you pretending to be so butthurt? Oh right, cause you need to follow your anti-Apple script.
Spoken truly like the whiny, entitled, spoiled, unbalanced troll you've repeatedly shown yourself to be. Incredible how you haven't given Apple, or Cook a word of credit in the past few years for any of their successes. That's how you spot a troll- they ignore all the inconvenient facts, and pick and choose the ones that fit their negative agenda. You lack any kind of critical thinking, perspective, or objectivity. Not to mention the fact that you have the hubris to pretend you're smarter than everyone who works at Apple.
so you would be okay if Apple paid Tim Cooks brother $570M for doing nothing?
Because that's exactly what GTAT did for Apple. Its a small amount relative to Apple but as an Apple investor i want answers.
Looks to me like Apple got back about $250M recently (see the GTAT financials, please) and possibly took ownership of some equipment that GTAT purchased with the money, which was placed in an Apple-owned facility. Apple's 10-K, due later this month, will shed some light. This is very different from just tossing $570M to Tim Cook's brother, but -hey - if it makes you feel better to make that argument, then knock yourself out.
HOW THE F*** DOES THIS HAPPEN?!!?
wait. you're a partner with Apple. iPhone 6 is the fastest selling phone in history, ?Watch is coming and Touch ID will be in every Apple product soon...
HOW THE F*** DOES THIS HAPPEN?!!?
You purchase enough Sapphire-making equipment to double the world's current annual output and tell Apple you can manufacture enough to put sapphire covers on the world's best smart-phones. But then your process gives terrible yield and Apple has to resort to plan B (Gorilla Glass 3) which, of course, they were ready for.
That's how.
all fair and good.
but GTAT shareholders lose 99% of their investment while the GTAT CEO swims in his millions.
Not Cook's fault, which you seem (finally) prepared to accept.