Apple sapphire partner GT Advanced Technologies files for bankruptcy
GT Advanced Technologies Inc., a sapphire manufacturer who won a massive $578 million prepayment from Apple, announced on Monday that it has filed for Chapter 11 bankruptcy court protection.
The company said it plans to continue conducting business as usual as it attempts to "resolve its current issues." The company had $85 million in cash as of Sept. 29.
Trading of GTAT stock was halted Monday morning in advance of the announcement. Once trading resumed, shares plummeted more than 90 percent.
"GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, president and chief executive officer of GT. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.
"We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses."
It was revealed in November 2013 that GT Advanced Technology had won a $578 million multi-year contract with Apple to supply advanced sapphire material. Apple uses sapphire in its iPhone lineup to protect the rear-facing camera, as well as the Touch ID fingerprint sensing home button. It will also be featured in some Apple Watch models when the wrist-worn device debuts next year.
Sapphire is a hardened material that is said to be resistant to scratches from all materials except for diamonds. The size of GT Advanced's deal with Apple led to hopeful speculation that the iPhone 6 would feature a sapphire cover, but the reality is the material is too expensive and prone to shattering to be put to use in larger panels.
Monday's announcement came with no information on how or if the bankruptcy filing might affect its relationship with Apple. The infusion of cash from the iPhone maker had helped enable GT Advanced to expand, retrofitting a facility in Massachusetts, and also adding new furnaces for expanded production at its operations in Arizona.
The company said it plans to continue conducting business as usual as it attempts to "resolve its current issues." The company had $85 million in cash as of Sept. 29.
Trading of GTAT stock was halted Monday morning in advance of the announcement. Once trading resumed, shares plummeted more than 90 percent.
"GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, president and chief executive officer of GT. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.
"We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses."
It was revealed in November 2013 that GT Advanced Technology had won a $578 million multi-year contract with Apple to supply advanced sapphire material. Apple uses sapphire in its iPhone lineup to protect the rear-facing camera, as well as the Touch ID fingerprint sensing home button. It will also be featured in some Apple Watch models when the wrist-worn device debuts next year.
Sapphire is a hardened material that is said to be resistant to scratches from all materials except for diamonds. The size of GT Advanced's deal with Apple led to hopeful speculation that the iPhone 6 would feature a sapphire cover, but the reality is the material is too expensive and prone to shattering to be put to use in larger panels.
Monday's announcement came with no information on how or if the bankruptcy filing might affect its relationship with Apple. The infusion of cash from the iPhone maker had helped enable GT Advanced to expand, retrofitting a facility in Massachusetts, and also adding new furnaces for expanded production at its operations in Arizona.
Comments
/sorry
Sapphire is a hardened material that is said to be resistant to scratches
=blink= Sapphire is already hard. Not in the way "math is hard", but sapphire is a hard material.
EDIT: Chris_CA and Mac-sochist have explained what is meant by "hardened" later in this thread. While it's not clear to me that the hardening step by Apple is what was meant in the wording of the article about GT AT, I'm willing to give the benefit of the doubt. Thanks!
That analyst covering GT Advanced really should be fired. He was pumping the stock and apparently didn't do any homework if they were in that bad of financial condition.
I would expect that Apple won't let this be a major issue for anyone concerned.
Or Apple has cancelled the contract and the company is well and truely stuffed and then Apple inherits a large sapphire manufacturing facility and it's IP. Stranger things have happened in business.
"Well the 518 million dollars was a great help, but once the boards wages and bonus' were paid, there was just nothing left in the pot"
Bankruptcy is not necessarily the end of the world. It simply provides a "breather" for getting one's affairs in order.
I would expect that Apple won't let this be a major issue for anyone concerned.
yeah some people use Bankruptcy is a business strategy. But I am beginning to suspect they are not that smart.
It appears they over extended themselves and maybe they sold Apple one being able to do a iphone size display and it all fell apart and we now know what direction Apple went in. They have money in the bank, but their debt out weights what they have in the bank as well as future AR and sales forecast and their creditors were coming after them.
Just a nasty rumors that enables another Apple rumor of another Apple product having a low yield output and will be in short supply when product launched a la Apple Watch which increases curiosity and demand because Apple knows people don't want to miss out! Expect long lines at your local Apple store on launch day!
Bankruptcy is not necessarily the end of the world. It simply provides a "breather" for getting one's affairs in order.
I would expect that Apple won't let this be a major issue for anyone concerned.
I agree with you, but it's a little more than that. It's a plea to a judge to let them pay their creditors less than they are owed. On the other hand if they don't get bankruptcy protection and go out of business then the creditors get even less. But this is just a hiccup for Apple.
Bankruptcy is not necessarily the end of the world. It simply provides a "breather" for getting one's affairs in order.
I would expect that Apple won't let this be a major issue for anyone concerned.
Right, because $587 MILLION dollars did do the trick.....
Agree, end of the world is a bit much, but if that kind of cash infusion and guaranteed work does not make a company successful, you need to replace management. And what of Apple teaming up with what is now apparently a very poorly ran company? Bad DD!
1.759.30 (84.16%)
Just no. It's is not hardened. It is hard.
Third in hardness to silicon carbide (on wet and dry paper used in metalwork) and diamond.
Is it not "said", it is shown to be the case with a vast amount of evidence. It's not hearsay that it's as hard as it is.
It is not resistant to scratches, it is impervious afaik!
This sentence is ridiculous.
Or GTAT could rise again, it's Chapter 7 we don't want! I own GTAT too.