Apple sapphire partner GT Advanced seeks to 'wind down' plant operations
New details of Apple sapphire partner supplier GT Advanced revealed on Thursday, with one report saying the sapphire maker asked the court for permission to "wind down" operations at its manufacturing plant.
According to Re/code, GT asked a U.S. bankruptcy court judge to close the plant. Details on the motion are unavailable as the company asked to keep documents sealed to protect confidential contracts made with Apple.
Earlier this week, GT Advanced filed for Chapter 11 bankruptcy protection, a move Apple called "surprising." Last November, the Cupertino tech giant inked a $578 million deal with GT to build out a state-of-the-art sapphire production facility in Mesa, Ariz.
It was later learned that Apple paid four out of five advances, but withheld a final $139 million payment due in October for unknown reasons. Follow-up reports claim Apple tried to help GT meet contractual obligations that would qualify the firm to receive this final installment, which was due in October.
For its part, Apple said it remains dedicated to the jobs created in Arizona and is currently working with government officials to make sure those positions are not liquidated. It is not clear what the company intends to do if GT successfully closes the site.
Judge Henry Boroff has reportedly scheduled an Oct. 15 hearing to further examine the motion.
According to Re/code, GT asked a U.S. bankruptcy court judge to close the plant. Details on the motion are unavailable as the company asked to keep documents sealed to protect confidential contracts made with Apple.
Earlier this week, GT Advanced filed for Chapter 11 bankruptcy protection, a move Apple called "surprising." Last November, the Cupertino tech giant inked a $578 million deal with GT to build out a state-of-the-art sapphire production facility in Mesa, Ariz.
It was later learned that Apple paid four out of five advances, but withheld a final $139 million payment due in October for unknown reasons. Follow-up reports claim Apple tried to help GT meet contractual obligations that would qualify the firm to receive this final installment, which was due in October.
For its part, Apple said it remains dedicated to the jobs created in Arizona and is currently working with government officials to make sure those positions are not liquidated. It is not clear what the company intends to do if GT successfully closes the site.
Judge Henry Boroff has reportedly scheduled an Oct. 15 hearing to further examine the motion.
Comments
Apple lawyers will flash mob the court room... That judge will see more silk suits that day then he's seen all his life.
I'm pretty sure Apple isn't going to lose much, if anything, here, since I think all the equipment they bought will go back to them.
If they did indeed pocket the money I think that would be easy to prove. They have this nice new and big building in AZ, they've been paying people who worked there, etc., etc. Somehow, someway, things flew out of control and if much of an effort was made to stem the flow of blood ($$$), it didn't work. Running a potential big business is work, and whoever was involved just couldn't handle it. Apple "may" end up owning the company, at least this plant... but courts can really grind slowly. This was a real shame.
I'm pretty sure Apple isn't going to lose much, if anything, here, since I think all the equipment they bought will go back to them.
Not according to our resident guru, "sog". LOL!
So, is this good or bad for the stock? Bought @ $.90, not sure if I should dump it all or wait for some sort of miracle spike. Is there ANY scenario where the stock would recover?
How about: This is a well planned bluff by GTAT in which Apple will succumb to because it's more cost effective for Apple to pay to keep their investment afloat which would then shoot the stock up to between 2 and 3 dollars per share.
(NOTE: THIS IS NOT A PREDICTION)
How about: This is a well planned bluff by GTAT in which Apple will succumb to because it's more cost effective for Apple to pay to keep their investment afloat which would then shoot the stock up to between 2 and 3 dollars per share.
(NOTE: THIS IS NOT A PREDICTION)
I hope so. I picked up some stock at $1.36/share. Pretty late to it, really.
If it reaches $2 I will probably sell, the stock is way too volatile.
Yesterday, I laid out my thoughts on this situation and suggested that the situation might not be so bad to have warranted all of the collapse in the share price. That with that last $139 million payment form Apple, or an equivalent deferral of debt payments by the bankruptcy court, the company might be able to forge ahead. This was an informed assumption. But today's news and the fact that the bankruptcy details are closed suggests to me that my assumption is either wrong, or, even if correct, is no longer investable. I bought shares at $1.14 in Wednesday's after-market session and sod them today for exactly the same price.
To those who are still holding the shares, you need to consider the following:
1. Apple owns the land and buildings that make up the AZ facility.
2. Apple has little incentive to save GTAT from bankruptcy. The money Apple lent to GTAT is secured by the sapphire furnaces and other equipment installed at Apple's AZ facility. With the bankruptcy court's blessing, ownership of that equipment can be transferred to Apple.
3. GTAT's proposed wind down of the sapphire works may be in anticipation of turning over the equipment to Apple in lieu of repayment of the loan. There are likely some formal procedures and employee commitments that GTAT must deal with before Apple can hire any of GTAT's employees at that facility to keep it running and this might be what the wind down is in reference to. I doubt we're talking about trucking furnaces out of the buildings.
4. The bankruptcy process, because it is closed, will not soon reveal the facts investors need to have in order to make an informed investment. If you are still in the shares after the announcement of the closed proceedings, you are speculating, even if you originally took the position as an investment.
My recommendation is to understand you goals with this position, ask yourself why you are in it, and what the probability your goals will be met. Me? I'd move on to another, more transparent investment.
Probably a good idea for most but for those willing to take some risk it might recover.
The problem with "could" is that its not proof of anything, but once you put it out there, some people use it as "proof" for their agendas.
The whole thing stinks to high heaven.