GT Advanced blames Apple for one-sided sapphire contract that resulted in $461M loss

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Comments

  • Reply 21 of 91
    flydogflydog Posts: 277member
    Quote:

    Originally Posted by sog35 View Post

     

    Why didn't they warn investors before going bankrupt?


     

    They did warn investors when their filed their 10-K and 10-Q with the SEC.  There is nothing in those financial filings that would have supported that this was a healthy company with a bright future.  To the contrary, they were burning cash and had no revenues to show for it, and a bankruptcy was indeed inevitable and obvious to anyone that took the time to actually review the financials.    

  • Reply 22 of 91

    What could GTAT do? Apple was holding an iPhone to their head.  /s 

  • Reply 23 of 91
    fracfrac Posts: 480member
    The comment about production machinery is odd. Sapphire is/was GTAT's expertise and even if Apple did buy the machinery under the terms of the loan, if I was the one operating them I'd be very sure before the purchase that they were up to the job...no? And if I were Apple, with no real skill in large scale sapphire production, I would ask the experts - not necessarily GTAT, but certainly another supplier outside of the proposed contract.
    There's definitely something odd about this, I just can't put my finger on it.
  • Reply 24 of 91
    jkichlinejkichline Posts: 1,335member

    What? You signed the contract and you took the money! Welcome to the "business world"... you must be new here.  You got a crapload of money and *gasp* were required to make good on your commitments. Talk about a bunch of entitled, whiny crybabies!  I tell you what... why don't you go lobby the government to raise minimum wage and you can go work at McDonalds.  There... we've taken your risk away for you.  Jeez!

  • Reply 25 of 91
    So gt took a huge risk - but they don't want to pay if the risk fails?
  • Reply 26 of 91
    Quote:

    Originally Posted by AppleInsider View Post



    "Unfortunately, the production of 262kg boules of sapphire could not be accomplished within the time frames the parties had agreed, and was more expensive than anticipated," Squiller's filing reads...




    "GTAT believes that it was unable to achieve its planned fabrication cost and production targets because many of the tools did not meet their performance and reliability specifications," the COO wrote.

     

    The question that now needs to be answered is: When did the COO and CEO know the above -- was it pre or post stock sale, pre or post telling the shareholders that GTA was doing well?

  • Reply 27 of 91
    Here's my guess. GTAT gambled that producing boules two-and-a-half times the size of the then-standard size would result in a two-and-a-half times amount of usable sapphire. The big secret, not to be revealed, is "what was the acceptance criterion?" The details of a failure is an industrial secret worth keeping as much as the details of the success. Whether GTAT deceived Apple or whether they pulled the wool over their own eyes, it doesn't really make any difference at this point. The accelerated process didn't work out, that much seems clear.
  • Reply 28 of 91
    If this is true, then GTAT had been hemoraging money for a while now. Half a billion dollars does not just suddenly disappear. That being the case, there truly is no excuse for the assurances that the CEO made to the stock holders only a few months ago. He was either lying then or he is lying now. Either way, this guy and his his whole executive team should face legal action.

    Apple or no Apple, this is wrong. I have no sympathy for what's coming to them.
  • Reply 29 of 91
    solipsismxsolipsismx Posts: 19,566member
    sog35 wrote: »
    Only the shareholders got screwed.

    What about all the other employees?
    sog35 wrote: »
    WRONG.

    Guidance from the CEO was for a profitable 2014 and over a 200,000,000 in profit in 2016.
    There was ZERO warning the guidance had to be adjusted.

    "We remain confident in our ability to achieve our 2016 non-GAAP earnings per share target of at or above $1.50."
    GTAT CEO - 6 weeks before BANKRUPT

    http://www.streetinsider.com/Earnings/GT+Advanced+Technologies+%28GTAT%29+Misses+Q2+EPS+by+2c%3B+Revises+FY14+EPS+Outlook+Above+Consensus/9717894.html

    Now THIS is something that backs up your comment about fraud. You should do more of that
  • Reply 30 of 91
    Awwww... Well, that explains it... GT Advanced was led by children...

    Last time I checked, contracts are signed by two parties... If GTAT signed a one-sided agreement, they only have themselves to blame...
  • Reply 31 of 91
    What's missing for me is GTAT explaining how they were not complete idiots for agreeing to all of this.
    But maybe that's just too hard to do. "We gambled and lost." isn't the smart thing to say now, I imagine.
  • Reply 32 of 91
    maestro64maestro64 Posts: 4,562member
    Quote:

    Originally Posted by sog35 View Post

     

    CROOKS and FRAUDS to the very end.

     

    So GTAT was in such dire straights?  Why didn't they warn investors before going bankrupt?  Total CROOKS.

     

    Why didn't they go to Apple to discuss the situation?  Because they wanted the stock price to keep going up and cash in on TENS OF MILLIONS in stock sells.


    I know you and other felt that GTAT knew in August, here is the information which shows it came to head in Sept

     

    Quote:


    As recently as a few weeks before the Petition Date, GTAT senior management made a detailed presentation to Apple senior management in charge of the sapphire growth project and advised them that GTAT was losing substantial amounts, that certain specifications needed to be reviewed and that unless pricing was revised and the final prepayment was made in September that it was projected to run out of cash in a few weeks. While Apple responded with various proposals, after intense negotiations, none of Apple's proposals solved the economic issues in an effective manner, and GTAT believed that acceptance of such proposals would have exposed GTAT to further risk.


  • Reply 33 of 91
    jfc1138jfc1138 Posts: 3,090member
    Quote:

    Originally Posted by sgordon View Post



    Clearly a case of bad management - on both sides. GTA have only themselves to blame. However it's also not in apples best interest either.



    Risk is like that: in the rear view mirror you see "bad management" while going forward at the time the risks could be judged manageable for the potential gains.

  • Reply 34 of 91
    The CEO of GTAT also became flaccid during sex, and this was also blamed on Apple...
  • Reply 35 of 91
    Quote:

    Originally Posted by Apple ][ View Post

     

    I have no problems with contracts even if they're lopsided.

     

    Apple didn't hold a gun to anybody's head and force them to sign.


     

    Maybe Marc Newson did.

    http://macdailynews.com/2014/10/24/apple-designed-marc-newson-designs-double-barrelled-shotgun-for-beretta

  • Reply 36 of 91
    boltsfan17boltsfan17 Posts: 2,160member
    Quote:

    Originally Posted by SolipsismX View Post





    That's what I'm wondering. It's one thing for a customer not to read their iTunes EULA after each update but it's another for a corporation to not have every character analyzed on a multi-year contract before agreeing to it.

    It doesn't make any sense. My assumption is GTAT were in way over their heads. If they truly did feel the equipment Apple selected wasn't economically feasible to create the product Apple wanted, why didn't they negotiate the equipment they wanted to use or just not accept the contract.  

  • Reply 38 of 91
    ibeamibeam Posts: 322member
    Quote:
    Originally Posted by SolipsismX View Post





    That's what I'm wondering. It's one thing for a customer not to read their iTunes EULA after each update but it's another for a corporation to not have every character analyzed on a multi-year contract before agreeing to it.

    I think they basically under bid the job. Happens all the time. They want to be the low bidder to get the job but, you can't deliver if it costs you more to make the product than what you are earning. This manufacturing process was uncharted territory. Apple was relying on GT for expertise. It was definitely not in Apple's best interest to have them default.

     

    It was unscrupulous of the executives to bail with a golden parachute but I doubt that was their original plan.

  • Reply 39 of 91
    droidftwdroidftw Posts: 1,009member
    So gt took a huge risk - but they don't want to pay if the risk fails?
    Who do they think they are a 'too big to fail' bank?
  • Reply 40 of 91
    clemynxclemynx Posts: 1,510member
    Well booohoo
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