Intriguing. That's all I can say at this point, dudes. Looking forward to future details at some point. Not interested in speculating what happened, but can wait for the facts.
Tim, if there was ever a time to go "thermonuclear" on someone, this is it. Seek to acquire GTAT as repayment for the loan, fire the management, then run the plant.
GTAT's entire market capitalization currently stands at $111M. Apple could eat them for breakfast. Apple literally makes more than that in profit per day. This filing is despite having millions in the bank (they're not broke) is probably to save the company from being bought by Apple through injunction. At least that's my guess.
So GT is playing the sympathy card trying to make Apple look like the bad guy? :no:
Sounds like a convenient scapegoat for poor executive decision making.
Notice they're not claiming that Apple breached its contractual obligations, or that Apple misrepresented the terms and conditions of the contract.
Although they haven't disclosed very much at all.
My thinking is that GTAT signed the contract thinking they could hold up production and squeeze Apple for more money when push came to shove... instead, Apple fell back on Gurilla Glass and shipped anyway. Apple is not a company to play hard ball with...
Those criticizing GT should wait until more details come out.
Also, keep in mind that sapphire production on this huge a scale is new. All sorts of gotchas can come up. Apple is as likely to be as much as fault for not planning for them as GT.
Ha ha! The only thing more idiotic than saying Apple is "as much at fault" as GTAT is GTAT saying that the terms of a contract they WILLINGLY signed were too "oppressive and burdensome"!
Send the CEO and entire board of directors to jail.
The first step here is to seize the personal assets of the CEO while figuring out just how long to throw his ass in jail.
Why the FUK didn't Tim Cook do better due dilegence on these guys? The CEO is a total FRAUD and CROOK.
The "burdensome and oppressive" contract signals he DID do due diligence: and loaded the contract in defense. GTAT had that ion beam tech so it was a gamble Cook hedged with the contract.
wtf are you talking about! The GTAT CEO said every thing was great and on schedule on August 26th. The iPhone came out of Sept 19th. Do you really think that on August 26th the GTAT CEO did not know they were not making the iPhone screens? Seriously! It takes MONTHS to build enough screens for an iPhone launch. Of course he knew there were not making the iPhone screens BEFORE August 26th.
What makes you think that he didn't believe everything was great as of August 26th? Let's assume for a second that GTAT is a piece of shit company and didn't hit their quality target. If you are Apple, what do you do? Create a maelstrom about a supplier weeks before you launch your product. Of course not. Instead, you tell your dumb shit supplier that you are pushing the launch of sapphire back a year and tell them to prepare for production of the watch.
Your posts ASSume that Apple terminated the contract at the same time they cancelled orders for iPhone 6 displays. However, that's not likely how Apple would do it. Secondly, maybe the plan all along was for sapphire displays on iPhone 6S (where "s" stands for "sapphire").
So there you have it, two perfectly reasonable scenarios where the CEO could have been telling the truth on his earnings report. Personally, I don't think it makes any sense for the CEO to lie on August 26. No question this was going to end in litigation. Would he really lie about it in a conference call? For what? To sell $160K in stock? Really? Makes no sense.
Just to clarify all materials will bend and return to their prior shape so long as you don't exceed the yield strength. The elastic limit is inversely proportional to length. For example, a 2 inch piece of wood doesn't appear to bend, but a 20 foot board of the same thickness is like a noodle. Sapphire can be made more flexible or less flexible than glass or aluminum depending on its thickness.
Great point, Ash. I suspect that the flexibility isn't so much the issue - it's even possible that something more bendy would provide superior performance in drops. I wonder what Apple will do next.
If we want to really speculate, maybe Apple is planning for sapphire displays next year (iPhone 6s) and they think GTAT is a shitty supplier and a liability to their supply channel. However, GTAT probably has a good patent portfolio. So Apple sets up the contract with very stringent performance parameters, knowing they aren't likely to perform. Most supply agreements have clauses that let the customer have the product manufactured on their behalf by another supplier if the Supplier can't fulfill the contract. Apple just bankrupted GTAT and can probably contract with anyone it wants to have sapphire manufactured using GTAT technology. Apple would never do something like this unless they really needed the technology and the supplier was totally incompetent. That may be the case for GTAT. And, if that's your plan, the first thing you do is make sure that you own the property and the building. The hardest part about the timing of a construction project is the permitting. Apple would need to own the building to avoid re-permitting the project, which could potentially cause them to miss a product launch. Surprise, surprise...Apple owns the building in Arizona.
So you heard it here first. Sapphire screens from Arizona will be the flagship feature of the iPhone 6S.
Some of you told me not to jump to conclusions but that is what they are.
They basically sacrificed the common shareholders (made them lose 95% of their investment) in order to renegotiate with Apple.
Bunch of CROOKS that deserve to be thrown in jail.
You don't say your company has a STRONG BALANCE SHEET and a strong CASH and REVENUE position on August 26th and then go BANKRUPT 6 weeks later. They FLATOUT lied to investors and should be thrown in jail.
So its bad deal they SIGNED????
Not for the CEO who cashed in on $10,000,000 in stock options this year.
I was one of those who asked where your proof was, but continuing developments are adding points in your favor. We're a long way from getting to the truth, but neither side has exactly been covering itself in glory lately. You and I and many others no doubt will be staying tuned.
I'm with you. I just wish Sog would dial it down some.
So GT is playing the sympathy card trying to make Apple look like the bad guy?
This is how chapter 11 works. And yes, it is ugly...
You cannot say "well, we went in way over our head and now are screwed", because then you will not be granted chapter 11 protection, which means chapter 7 and liquidation of the company.
This is how such legal proceedings work people. You need to point out circumstances that were not fully under your control to get chapter 11 protection. (read: no chapter 11 without finger pointing)
But again, if foul play by the GTAT board by delaying chapter 11 filing is involved is a different topic, that will be addressed by law suits for sure.
You told me not to buy? I doubt that, because I don't think I solicited your opinion beforehand.
Yeah, I sold at $1.40 or so. Bought @ $0.90. So yeah, I'm good. I didn't invest because I believed in the company, I did because it seemed like a good short term opportunity.
Out of curiosity, how much did you have invested? Seems like most of your life's savings, based on your never-ending posts of rage. Maybe next time, diversify, and don't let rumors affect your buying decisions.
Not trying to cook up a conspiracy theory, but there is a lot more fishy here. All these 'analysts' hyping the stock, making 'factual' statements about Apple using their products despite zero logic (using sapphire displays, Apple might have had 1 million devices at $1200 and up for the first weekend, not 10 million at their current price)... I would not be concerned if they would have done the usual thing, that's crying doom whatever Apple does. But hyping something completely and flatly unreasonable makes me wonder.
Yes, this is how the system works. Analysts pump and dump stocks based on their analysis, which of course can be wrong entirely or simply made up.
You basically cook up some numbers and then spin the facts to match your numbers. Market analysis works in the same way.
And this is done over and over again with a lot of companies. In fact hyping something is way more common then crying doom. Especially with small companies hyping is easy. Crying doom usually only works with big companies that get a lot of media coverage.
I'll give you another nice example of the system: Facebook.
Before the IPO it was pumped. Then when the IPO went through the stock tanked and every analyst was writing bad stuff about their future. Why? Because right after the IPO the market makers are buying cheap puts. Now they need to get the stock down to cash in, so they sell short and the analysts enter the arena.
If enough hype was created before that mainstream media will jump in as well.. Once the stock is down they cover their positions go long and buy calls. And then the news just die down out of a sudden and you wait until the stock is as reasonable heights (what you actually expected) again - which might take a bit longer of course.
And look at FB now. Wooah, whopping 72 USD. Where is all the doom now?
This will reflect very bad on Apple, no doubt. Yes I concur with most others, unless we get more details it it looks like GTAT's CEO felt he could do something which Apple didn't want to do themselves (for what reason? Can think of only one now: That they didn't believe it was possible to pull through at all).
Remember, Apple owns the plant and owns the equipment (contractually if GTAT can't repay its loan), GTAT leased the building from Apple. See it this way, I give you the means to do it and you pay me for using my equipment on my location with your staff - I could theoretically do it myself but I'm not risking it and so you can try it. A bit like the courier industry where the big companies don't hold their own cars but shift the workload and financial risk to sub contractors.
It will not be looking good for Apple, in the public view. Even if Apple is not at fault, it will look bad for Apple. (and yes, nobody forced them to sign the contract) and yes you don't go bankrupt ten weeks later.
I also don't have a strong positive outlook for the facility or the jobs. Apple did NOT want to do this business themselves, this is what GTAT took on themselves. Too bad, I would have paid $$$ for a sapphire glass iPhone.
Sad, but as a matter of fact, it would surprise me if Apple went ahead and kept the fab operating (or reopen it later). Though they could do it if public pressure becomes too great.
As for the CEO, yes, I think he's gonna be careful where and when to cross the road - not likely people would like him much with 10,000,000 extra from a deal which he (sog emphasis style) KNEW is gonna turn sour eventually.
I also do think that this might be getting interesting, from a legal point of view. Where's the SEC...
Apparently GT Advanced's attorneys aren't very good at reading contracts. Nobody pointed a gun at their heads and told them to sign on the dotted line.
Quote:
Originally Posted by stoutie
So let me see if I understand this. A bunch of grown businessmen entered into a contract with Apple, and now those same businessmen are saying the deal they voluntarily entered into with Apple, their legally binding contractual agreement, was oppressive and burdensome? The sheer stupidity of that claim should be enough to get them tossed out of court moments after they arrive. This is a free country. You think you're getting a raw deal, don't sign the contract.
Quote:
Originally Posted by Yojimbo007
Why sign the contract? Did apple put a gun on their head?
If GTAT tried to counteroffer, or if they simply walked away without signing the deal, then they would surely be scorned by just about every Apple fan on the internet. Apple will always be viewed as the "good guy" so Apple's terms will always be fair and free of any ulterior motives.
"Who needs GTAT?"
"There are plenty of other suppliers willing to agree to Apple's terms without question", etc.
So GTAT would look like the bad guy no matter what.
Yes, this is how the system works. Analysts pump and dump stocks based on their analysis, which of course can be wrong entirely or simply made up.
You basically cook up some numbers and then spin the facts to match your numbers. Market analysis works in the same way.
And this is done over and over again with a lot of companies. In fact hyping something is way more common then crying doom. Especially with small companies hyping is easy. Crying doom usually only works with big companies that get a lot of media coverage.
I'll give you another nice example of the system: Facebook.
Before the IPO it was pumped. Then when the IPO went through the stock tanked and every analyst was writing bad stuff about their future. Why? Because right after the IPO the market makers are buying cheap puts. Now they need to get the stock down to cash in, so they sell short and the analysts enter the arena.
If enough hype was created before that mainstream media will jump in as well.. Once the stock is down they cover their positions go long and buy calls. And then the news just die down out of a sudden and you wait until the stock is as reasonable heights (what you actually expected) again - which might take a bit longer of course.
And look at FB now. Wooah, whopping 72 USD. Where is all the doom now?
Facebook is a crappy ponzi scheme company with profit outlook no where corelated to their actual stock price. Eventually, that redresses itself..
This is how chapter 11 works. And yes, it is ugly...
You cannot say "well, we went in way over our head and now are screwed", because then you will not be granted chapter 11 protection, which means chapter 7 and liquidation of the company.
This is how such legal proceedings work people. You need to point out circumstances that were not fully under your control to get chapter 11 protection. (read: no chapter 11 without finger pointing)
But again, if foul play by the GTAT board by delaying chapter 11 filing is involved is a different topic, that will be addressed by law suits for sure.
Apple needs to have its supply chain locked down way in advance (so, they would decide go no go probably in July at the latest, since they need Corning as a backup, probably before that) and process yields are also known well in advance (GTAT side) so they probably knew they would in April to May, so there is something immensely shady in GTAT not reporting anything until almost going belly up. Yes, I see much lawsuits in the future of GTAT if it survives.
Comments
"...forcing Apple into the arms of communist business environments because they do have their merits."
Amazing how many errors in one sentence fragment.
Apple is not "forced" to manufacture in China as it wasn't "forced" into Arizona. It was lured to both by extremely favorable conditions.
China is as "communist" as Henry Ford.
The "merits" of China include an exploited and underpaid work force. About as capitalistic as it gets.
GTAT's entire market capitalization currently stands at $111M. Apple could eat them for breakfast. Apple literally makes more than that in profit per day. This filing is despite having millions in the bank (they're not broke) is probably to save the company from being bought by Apple through injunction. At least that's my guess.
Oppressive contracts or inability to deliver... I guess it's easier to lay blame on somebody else.
My thinking is that GTAT signed the contract thinking they could hold up production and squeeze Apple for more money when push came to shove... instead, Apple fell back on Gurilla Glass and shipped anyway. Apple is not a company to play hard ball with...
Send the CEO and entire board of directors to jail.
The first step here is to seize the personal assets of the CEO while figuring out just how long to throw his ass in jail.
Again I ask:
Why the FUK didn't Tim Cook do better due dilegence on these guys? The CEO is a total FRAUD and CROOK.
The "burdensome and oppressive" contract signals he DID do due diligence: and loaded the contract in defense. GTAT had that ion beam tech so it was a gamble Cook hedged with the contract.
wtf are you talking about! The GTAT CEO said every thing was great and on schedule on August 26th. The iPhone came out of Sept 19th. Do you really think that on August 26th the GTAT CEO did not know they were not making the iPhone screens? Seriously! It takes MONTHS to build enough screens for an iPhone launch. Of course he knew there were not making the iPhone screens BEFORE August 26th.
What makes you think that he didn't believe everything was great as of August 26th? Let's assume for a second that GTAT is a piece of shit company and didn't hit their quality target. If you are Apple, what do you do? Create a maelstrom about a supplier weeks before you launch your product. Of course not. Instead, you tell your dumb shit supplier that you are pushing the launch of sapphire back a year and tell them to prepare for production of the watch.
Your posts ASSume that Apple terminated the contract at the same time they cancelled orders for iPhone 6 displays. However, that's not likely how Apple would do it. Secondly, maybe the plan all along was for sapphire displays on iPhone 6S (where "s" stands for "sapphire").
So there you have it, two perfectly reasonable scenarios where the CEO could have been telling the truth on his earnings report. Personally, I don't think it makes any sense for the CEO to lie on August 26. No question this was going to end in litigation. Would he really lie about it in a conference call? For what? To sell $160K in stock? Really? Makes no sense.
Just to clarify all materials will bend and return to their prior shape so long as you don't exceed the yield strength. The elastic limit is inversely proportional to length. For example, a 2 inch piece of wood doesn't appear to bend, but a 20 foot board of the same thickness is like a noodle. Sapphire can be made more flexible or less flexible than glass or aluminum depending on its thickness.
Great point, Ash. I suspect that the flexibility isn't so much the issue - it's even possible that something more bendy would provide superior performance in drops. I wonder what Apple will do next.
Even if it was an "oppressive" contract, GTAT agreed to the terms of it. Who's responsible for that?
If we want to really speculate, maybe Apple is planning for sapphire displays next year (iPhone 6s) and they think GTAT is a shitty supplier and a liability to their supply channel. However, GTAT probably has a good patent portfolio. So Apple sets up the contract with very stringent performance parameters, knowing they aren't likely to perform. Most supply agreements have clauses that let the customer have the product manufactured on their behalf by another supplier if the Supplier can't fulfill the contract. Apple just bankrupted GTAT and can probably contract with anyone it wants to have sapphire manufactured using GTAT technology. Apple would never do something like this unless they really needed the technology and the supplier was totally incompetent. That may be the case for GTAT. And, if that's your plan, the first thing you do is make sure that you own the property and the building. The hardest part about the timing of a construction project is the permitting. Apple would need to own the building to avoid re-permitting the project, which could potentially cause them to miss a product launch. Surprise, surprise...Apple owns the building in Arizona.
So you heard it here first. Sapphire screens from Arizona will be the flagship feature of the iPhone 6S.
I'm with you. I just wish Sog would dial it down some.
So GT is playing the sympathy card trying to make Apple look like the bad guy?
This is how chapter 11 works. And yes, it is ugly...
You cannot say "well, we went in way over our head and now are screwed", because then you will not be granted chapter 11 protection, which means chapter 7 and liquidation of the company.
This is how such legal proceedings work people. You need to point out circumstances that were not fully under your control to get chapter 11 protection. (read: no chapter 11 without finger pointing)
But again, if foul play by the GTAT board by delaying chapter 11 filing is involved is a different topic, that will be addressed by law suits for sure.
How's your GTAT shares doing?
Did you sell yet?
I told you not to buy that POS company.
You told me not to buy? I doubt that, because I don't think I solicited your opinion beforehand.
Yeah, I sold at $1.40 or so. Bought @ $0.90. So yeah, I'm good. I didn't invest because I believed in the company, I did because it seemed like a good short term opportunity.
Out of curiosity, how much did you have invested? Seems like most of your life's savings, based on your never-ending posts of rage. Maybe next time, diversify, and don't let rumors affect your buying decisions.
Not trying to cook up a conspiracy theory, but there is a lot more fishy here. All these 'analysts' hyping the stock, making 'factual' statements about Apple using their products despite zero logic (using sapphire displays, Apple might have had 1 million devices at $1200 and up for the first weekend, not 10 million at their current price)... I would not be concerned if they would have done the usual thing, that's crying doom whatever Apple does. But hyping something completely and flatly unreasonable makes me wonder.
Yes, this is how the system works. Analysts pump and dump stocks based on their analysis, which of course can be wrong entirely or simply made up.
You basically cook up some numbers and then spin the facts to match your numbers. Market analysis works in the same way.
And this is done over and over again with a lot of companies. In fact hyping something is way more common then crying doom. Especially with small companies hyping is easy. Crying doom usually only works with big companies that get a lot of media coverage.
I'll give you another nice example of the system: Facebook.
Before the IPO it was pumped. Then when the IPO went through the stock tanked and every analyst was writing bad stuff about their future. Why? Because right after the IPO the market makers are buying cheap puts. Now they need to get the stock down to cash in, so they sell short and the analysts enter the arena.
If enough hype was created before that mainstream media will jump in as well.. Once the stock is down they cover their positions go long and buy calls. And then the news just die down out of a sudden and you wait until the stock is as reasonable heights (what you actually expected) again - which might take a bit longer of course.
And look at FB now. Wooah, whopping 72 USD. Where is all the doom now?
This will reflect very bad on Apple, no doubt. Yes I concur with most others, unless we get more details it it looks like GTAT's CEO felt he could do something which Apple didn't want to do themselves (for what reason? Can think of only one now: That they didn't believe it was possible to pull through at all).
Remember, Apple owns the plant and owns the equipment (contractually if GTAT can't repay its loan), GTAT leased the building from Apple. See it this way, I give you the means to do it and you pay me for using my equipment on my location with your staff - I could theoretically do it myself but I'm not risking it and so you can try it. A bit like the courier industry where the big companies don't hold their own cars but shift the workload and financial risk to sub contractors.
It will not be looking good for Apple, in the public view. Even if Apple is not at fault, it will look bad for Apple. (and yes, nobody forced them to sign the contract) and yes you don't go bankrupt ten weeks later.
I also don't have a strong positive outlook for the facility or the jobs. Apple did NOT want to do this business themselves, this is what GTAT took on themselves. Too bad, I would have paid $$$ for a sapphire glass iPhone.
Sad, but as a matter of fact, it would surprise me if Apple went ahead and kept the fab operating (or reopen it later). Though they could do it if public pressure becomes too great.
As for the CEO, yes, I think he's gonna be careful where and when to cross the road - not likely people would like him much with 10,000,000 extra from a deal which he (sog emphasis style) KNEW is gonna turn sour eventually.
I also do think that this might be getting interesting, from a legal point of view. Where's the SEC...
Then why sign on the dotted line.
Apparently GT Advanced's attorneys aren't very good at reading contracts. Nobody pointed a gun at their heads and told them to sign on the dotted line.
So let me see if I understand this. A bunch of grown businessmen entered into a contract with Apple, and now those same businessmen are saying the deal they voluntarily entered into with Apple, their legally binding contractual agreement, was oppressive and burdensome? The sheer stupidity of that claim should be enough to get them tossed out of court moments after they arrive. This is a free country. You think you're getting a raw deal, don't sign the contract.
Why sign the contract? Did apple put a gun on their head?
If GTAT tried to counteroffer, or if they simply walked away without signing the deal, then they would surely be scorned by just about every Apple fan on the internet. Apple will always be viewed as the "good guy" so Apple's terms will always be fair and free of any ulterior motives.
"Who needs GTAT?"
"There are plenty of other suppliers willing to agree to Apple's terms without question", etc.
So GTAT would look like the bad guy no matter what.
Yes, this is how the system works. Analysts pump and dump stocks based on their analysis, which of course can be wrong entirely or simply made up.
You basically cook up some numbers and then spin the facts to match your numbers. Market analysis works in the same way.
And this is done over and over again with a lot of companies. In fact hyping something is way more common then crying doom. Especially with small companies hyping is easy. Crying doom usually only works with big companies that get a lot of media coverage.
I'll give you another nice example of the system: Facebook.
Before the IPO it was pumped. Then when the IPO went through the stock tanked and every analyst was writing bad stuff about their future. Why? Because right after the IPO the market makers are buying cheap puts. Now they need to get the stock down to cash in, so they sell short and the analysts enter the arena.
If enough hype was created before that mainstream media will jump in as well.. Once the stock is down they cover their positions go long and buy calls. And then the news just die down out of a sudden and you wait until the stock is as reasonable heights (what you actually expected) again - which might take a bit longer of course.
And look at FB now. Wooah, whopping 72 USD. Where is all the doom now?
Facebook is a crappy ponzi scheme company with profit outlook no where corelated to their actual stock price. Eventually, that redresses itself..
This is how chapter 11 works. And yes, it is ugly...
You cannot say "well, we went in way over our head and now are screwed", because then you will not be granted chapter 11 protection, which means chapter 7 and liquidation of the company.
This is how such legal proceedings work people. You need to point out circumstances that were not fully under your control to get chapter 11 protection. (read: no chapter 11 without finger pointing)
But again, if foul play by the GTAT board by delaying chapter 11 filing is involved is a different topic, that will be addressed by law suits for sure.
Apple needs to have its supply chain locked down way in advance (so, they would decide go no go probably in July at the latest, since they need Corning as a backup, probably before that) and process yields are also known well in advance (GTAT side) so they probably knew they would in April to May, so there is something immensely shady in GTAT not reporting anything until almost going belly up. Yes, I see much lawsuits in the future of GTAT if it survives.