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

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Comments

  • Reply 41 of 91
    MacProMacPro Posts: 18,260member
    sog35 wrote: »
    He lost nothing.

    The CEO made over TEN MILLION DOLLARS selling stock options in the last 8 months.
    I'm sure the COO also made a couple million.
    The entire executive team made millions.

    Only the shareholders got screwed.

    Sorry I thought my sarcasm was so strong it didn't need /s tags ... Please go back and re-read and let me know where I went wrong.

    I was a share holder.
  • Reply 42 of 91
    MacProMacPro Posts: 18,260member
    ibeam wrote: »
    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.

    I would like a jury of 12 to decide if was their original plan rather than take their word for it given their behavior.
  • Reply 43 of 91
    ibeamibeam Posts: 322member
    Quote:
    Originally Posted by digitalclips View Post





    I would like a jury of 12 to decide if was their original plan rather than take their word for it given their behavior.

    In my opinion it doesn't matter whether it was their original plan or not, it sure looks like insider trading to me, but that is a separate issue. The other $490 million had to go somewhere. Probably just not enough capital to get the job done with set backs, poor yields, reengineering, etc.

  • Reply 44 of 91
    jfc1138jfc1138 Posts: 3,090member
    Quote:

    Originally Posted by Boltsfan17 View Post

     

    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.  




    Agreed: Apple certainly wanted (and still wants) the product: so if tweaks were necessary to the equipment why ever not solve the problem and get the product?

  • Reply 45 of 91
    Quote:

    Originally Posted by SolipsismX View Post





    What about all the other employees?

     

    :rolleyes: What about them?  They will probably lose their jobs...  duh. 

  • Reply 46 of 91
    radarthekatradarthekat Posts: 3,057moderator
    Quote:
    Originally Posted by KBeat View Post



    At this point, it's hard to take anything GTA says seriously. I mean, if the deal was so onerous and one sided in Apple's favor, why the hell did they sign it in the first place? They weren't forced to. They did so because they thought they could produce the product Apple required, and in doing so would make a fortune. When they then failed to produce, they blamed Apple.



    The only question remaining is why Apple would want to do business with people like this?



    It's worse than that.  GTAT was crashing hard in late 2013, in my opinion.  Just look at the collapse of revenue associated with their solar business lines, prior to their deal with Apple.  The Apple deal, which GTAT management likely knew they couldn't fulfill on, was the company's Hail Mary attempt to reboot their business.  They likely figured they had no option other than bankruptcy in late 2013, so they likely figured, what the heck, go down fighting.  Maybe we can get Apple to loosen up when they come to see what we already know; that there's no way in hell we'll accomplish what's implied by this contract.  So we'll sign to keep the lights on, then deal with the consequences as they come.  

     

    So here we are today, all consequenced up with nothing left but a pocketful of excuses.

  • Reply 47 of 91
    maestro64 wrote: »
    I know you and other felt that GTAT knew in August, here is the information which shows it came to head in Sept

    You do not lose half a billion dollars in 6 weeks. Nor do you indicate that your company is on track to meet 2014 projections and file bankrupcy weeks later. I don't like jumping to conclusions either, but this has faud written All over it.
  • Reply 48 of 91
    charlitunacharlituna Posts: 7,215member
    they signed the contract of their own accord. so why did they do that if it was so bad. clearly they didnt think so back then. only after they failed did issues with it being a nasty contract come up
  • Reply 49 of 91

    If Apple put up half a BILLION dollars, that's Apple taking a pretty big risk, isn't it? 

  • Reply 50 of 91
    MacProMacPro Posts: 18,260member

    It's worse than that.  GTAT was crashing hard in late 2013, in my opinion.  Just look at the collapse of revenue associated with their solar business lines, prior to their deal with Apple.  The Apple deal, which GTAT management likely knew they couldn't fulfill on, was the company's Hail Mary attempt to reboot their business.  They likely figured they had no option other than bankruptcy in late 2013, so they likely figured, what the heck, go down fighting.  Maybe we can get Apple to loosen up when they come to see what we already know; that there's no way in hell we'll accomplish what's implied by this contract.  So we'll sign to keep the lights on, then deal with the consequences as they come.  

    So here we are today, all consequenced up with nothing left but a pocketful of excuses.

    Which is why, with all due respect to @ibeam not agreeing, I mentioned a jury of 12 earlier. I am suspecting this was planned for the reasons you highlight..
  • Reply 51 of 91
    MacProMacPro Posts: 18,260member
    maccaguy wrote: »
    If Apple put up half a BILLION dollars, that's Apple taking a pretty big risk, isn't it? 

    It maybe relative. Billions must seem like Millions to Tim these days. I'd hate to have that problem ... (yes that was a joke)
  • Reply 52 of 91
    tmaytmay Posts: 3,762member
    Quote:

    Originally Posted by Frac View Post



    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.

    It's interesting that in one section (I'd have to re-read to point it out), Apple was guilty of purchasing the equipment without GTAT involvement; in another, GTAT purchased furnaces from GT who paid third party vendors for parts, more or less, as it seems that the COO isn't really sure what occurred.

     

    I chastised SOG for his rants early on, but reading this, I'm mostly convinced that this document is lipstick on a pig, the pig being the truth of what actually happened. I also found it humorous, that GTAT was complaining about power losses that added up to $10 m in actual boule losses. No wonder Apple didn't feel it necessary to deal with it; is was a rounding error against the $900 actual production costs. Surely Apple would have done something down the line to correct that, but it wasn't THE issue with production shortages; it was barely a factor.

     

    Good for them that Apple isn't going to contest it.

  • Reply 53 of 91
    MacProMacPro Posts: 18,260member
    redefiler wrote: »
    :rolleyes:  What about them?  They will probably lose their jobs...  duh. 


    Well Mr Duh Roll eyes... Soli was responding to this ... "Only the shareholders got screwed." So his response was quite correct by pointing out they were not the only ones screwed. Before being rude you should read more carefully.
  • Reply 54 of 91
    ibeamibeam Posts: 322member
    Quote:
    Originally Posted by digitalclips View Post





    Which is why, with all due respect to @ibeam not agreeing, I mentioned a jury of 12 earlier. I am suspecting this was planned for the reasons you highlight..

    Perhaps, but I still think it was unlikely. The reason is, I don't think Apple would have gone into business with them if that were a likely scenario. I'm sure Apple's due diligence would have uncovered the problems long before the contracts were drawn up.

  • Reply 55 of 91
    solipsismxsolipsismx Posts: 19,566member
    Well Mr Duh Roll eyes... Soli was responding to this ... "Only the shareholders got screwed." So his response was quite correct by pointing out they were not the only ones screwed. Before being rude you should read more carefully.

    I would have thought my quoted text would have made that clear.
  • Reply 56 of 91
    Quote:
    Originally Posted by Ken_sanders_aia View Post



    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...

    Maybe GTAT thought Apple was Corleone from The Godfather. "I can assure you in 30 seconds, either your signature or your brains will be on that contract." <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 57 of 91
    nolamacguynolamacguy Posts: 4,758member
    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.


     

    more unsubstantiated nonsense by our very own chicken little. you lost some money. we get it. but running a successful company is hard, and not doing it well doesnt equate to a criminal offense.

  • Reply 58 of 91
    Risk is like that but it's unprofessional and incorrect of them to blame apple for their own mistakes... If they said they mass a bad decision in going in to this deal its one thing but they had the choice to sign the deal or not. So long as apple honoured their side of the deal
  • Reply 59 of 91
    nolamacguynolamacguy Posts: 4,758member
    Quote:
    Originally Posted by SolipsismX View Post



    Now THIS is something that backs up your comment about fraud. You should do more of that

     

    a CEO being confident in August, then running into problems in September, in no way makes one a criminal, crook, fraud, or whatever other crap sog is whining about. the CEO stock sales were scheduled and approved. shit happens. it's not always criminal, and no serious investor would cry about something so routine (a company failing) as much as chicken little.

  • Reply 60 of 91
    nolamacguynolamacguy Posts: 4,758member
    Quote:
    Originally Posted by digitalclips View Post



    I would like a jury of 12 to decide if was their original plan rather than take their word for it given their behavior.

     

    that doesnt make sense. you get a jury when youve been charged w/ a crime, which is the result of an investigation. at this time there havent even been any charges filed.....for what, failing? not doing a good enough job? sorry, thats not criminal. its the norm, actually.

     

    from reading sog's posts it's clear hes an amateur trader, likes trying to play it like a game. thats fine. and will work out sometimes. but that doesnt mean a failed company or a failed investment is criminal. shit happens.

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