That's the "moral hazard" of publicly held companies. The executives can make decisions that provide personal enrichment short-term and expose the company to bankruptcy. Most obvious example: many of the large banking and financial companies during the real estate bubble.
If that is what happened here, are there no legal repercussions or actions share holders can take through the courts?
There is a lesson that was taught to me by a very successful investor, (he wasn't a Warren Buffett, but still very impressive). - When you set out to make a profit, don't take it all for yourself, leave something for the next guy. The 'next guy' remembers what you did and he will want to deal with you again.
There is a lesson that i knew since i was about 7 and most of my friends who run companies know. If the terms of the deal are not giving enough in your favour, then don't enter the contract. When my brother first tried to swap my all his "shiny coins" for my "dull piece of paper" , it didn't take much intelligence to reject the offer. Maybe GTA should have employed the same intelligence.
Not only did GTA _not_ leave enough profit for the next guy, they didn't even leave enough profit for themselves !!!
The US$50M penalty number means very little, it's for shock purposes. If the supplier chose not to pay and to break the contract then Apple would have to prove consequential loss as a direct result of any information that was leaked being in the public domain. In some circumstances of course that loss might be more than US$50M.
However anyone signing a contract should read it and understand what they are signing.
As an Apple shareholder, I would like the court to nullify the confidentiality agreement. Allow GTAT to release all the details and facts of the contract.
Apple basically had wishful thinking of how much sapphire they could get made in America for a certain price. GTAT execs might have known it wasnt entirely possible. They knew the contracts would bump their share price and shareholder value in the short run at least.
Their business plan might have been simply to break even or lose on the deal while apple helped them build infrastructure in the hopes that further money would come down the line.
There is a lesson that was taught to me by a very successful investor, (he wasn't a Warren Buffett, but still very impressive). - When you set out to make a profit, don't take it all for yourself, leave something for the next guy. The 'next guy' remembers what you did and he will want to deal with you again.
Really? So what profits have Apple generated so far from this supply contract with GTAT? You are easily hanged by your own arguments. Why don't you just come out and say that you don't like Apple, period, and at least be credited for your honesty rather than pretend to present a reasoned argument?
I assume when Apple says its committed to preserving jobs that they made at GT ADVANCED. I think GT will go bankrupt and Apple will create its own plant and employ those that were at GT ADVANCED. because I think sapphire will be long term in apple products.
@prokip
No Flame, just asking you to justify that statement, please give a argument to represent how you came to state that.
Am genuinely interested in your opinion on it
I'm not interested in their justification because there is none.
The fact is these GT Advanced people are giant-sized idiots and the SEC and their state's Attorney General should be very interested In what they've done.
As an Apple shareholder, I would like the court to nullify the confidentiality agreement. Allow GTAT to release all the details and facts of the contract.
As an AAPL shareholder myself, there would be no benefit to Apple having the details of privately negotiated contracts revealed. What in the world are you thinking?
I'm not interested in their justification because there is none.
The fact is these GT Advanced people are giant-sized idiots and the SEC and their state's Attorney General should be very interested In what they've done.
Make sure you don't apply for any job as a diplomat. There are always 2 sides, and the measure of a persons intelligence is very related to their ability to listen to anothers view.
Apple basically had wishful thinking of how much sapphire they could get made in America for a certain price. GTAT execs might have known it wasnt entirely possible. They knew the contracts would bump their share price and shareholder value in the short run at least.
Their business plan might have been simply to break even or lose on the deal while apple helped them build infrastructure in the hopes that further money would come down the line.
Oh, I'm pretty sure that the GTAT brass had a very good idea how easy or difficult it was to fulfill the contract terms. That is a natural problem with the corporations: how to make sure that the executives have the stockholders' interest in mind and not their own. The CEO basically threw his stockholders in the ditch when he saw the bonanza he will get from 'scheduled' stock sales. You could even be charitable and say he didn't set out to willfully defraud the stockholders but a positive integer followed by many zeroes has a way of changing the way you view the risks ahead of you.
Not that it's gone unnoticed, but this does nothing to help the idea of bringing manufacturing back to the US. If this company is any indication (a con job based on a superficial reading of the facts so far), why would any outfit like Apple or the others be willing to have components made in America? Not to mention the tax incentives the state of Arizona gave to lure the investment and building of the plant which, what, is presumably going to just sit there while employees now have to the look for work.
Perhaps the former CEO was right: those jobs are gone (overseas) and won't be coming back.
Make sure you don't apply for any job as a diplomat. There are always 2 sides, and the measure of a persons intelligence is very related to their ability to listen to anothers view.
Just because stupidity or incompetence may play a major part in this story does not excuse anyone from having possibly broken both the law and the terms of their contract with Apple.
I'm just curious where this whole defective product portion you keep talking about comes into play? I haven't seen that published anywhere yet.. Can you tell me where you've did discovered gtat's products were defective? That's newsworthy if accurate.
If the product was not defective Apple would have sent GTAT the final prepayment of $100M
Apple never sent the final prepayment because the product was not up to Apple's standards.
The final prepayment was scheduled for September. If the product was not defective Apple would have been buying BILLIONS of dollars worth of sapphire this year and GTAT would not be bankrupt. That is why GTAT wants to shut down the sapphire plant completely. Please understand that GTAT has NEVER mass produced sapphire. In the past they made sapphire machines but never mass produced sapphrie product.
You sound like a small investor who got burned and lost money on GTAT stock.
Make sure you don't apply for any job as a diplomat. There are always 2 sides, and the measure of a persons intelligence is very related to their ability to listen to anothers view.
Other than "Apple lied to us then held a gun to our heads and made us sign the contract", there is really no "other side of the argument".
Just because stupidity or incompetence may play a major part in this story does not excuse anyone from having possibly broken both the law and the terms of their contract with Apple.
Don't get me wrong, my opinion is that GTA messed up here
While i actually agree with you, neither of us are privy to the exact dealings and interactions, so without having the full story, or being directly involved, I am interested in other peoples views, maybe they might have something to say that might make me think a little different, or maybe they will make me more sure of my views.
Not that it's gone unnoticed, but this does nothing to help the idea of bringing manufacturing back to the US. If this company is any indication (a con job based on a superficial reading of the facts so far), why would any outfit like Apple or the others be willing to have components made in America? Not to mention the tax incentives the state of Arizona gave to lure the investment and building of the plant which, what, is presumably going to just sit there while employees now have to the look for work.
Perhaps the former CEO was right: those jobs are gone (overseas) and won't be coming back.
Oh those jobs are gone all right. The factories might come back, but the jobs won't ever.
Comments
If that is what happened here, are there no legal repercussions or actions share holders can take through the courts?
There is a lesson that was taught to me by a very successful investor, (he wasn't a Warren Buffett, but still very impressive). - When you set out to make a profit, don't take it all for yourself, leave something for the next guy. The 'next guy' remembers what you did and he will want to deal with you again.
There is a lesson that i knew since i was about 7 and most of my friends who run companies know. If the terms of the deal are not giving enough in your favour, then don't enter the contract. When my brother first tried to swap my all his "shiny coins" for my "dull piece of paper" , it didn't take much intelligence to reject the offer. Maybe GTA should have employed the same intelligence.
Not only did GTA _not_ leave enough profit for the next guy, they didn't even leave enough profit for themselves !!!
The US$50M penalty number means very little, it's for shock purposes. If the supplier chose not to pay and to break the contract then Apple would have to prove consequential loss as a direct result of any information that was leaked being in the public domain. In some circumstances of course that loss might be more than US$50M.
However anyone signing a contract should read it and understand what they are signing.
No. You. ARE WRONG.
Its GTAT who went to far. They risked EVERYTHING on the Apple deal.
Aside from the fact that it's getting pretty boring, hearing you restate the same rant a dozen times
(with minor variations), try to stay on point at least.
The article doesn't say that Apple ever imposed this fine on GTAT - GTAT is including it in their ludicrous filing
to add weight to their depiction of Apple as a tyrannical partner.
So, without engaging the point of prokip's post, you aren't engaging the topic of whether the penalty is fair or draconian.
You're just reranting about who you think the scumbags are.
Actually, without disclosing valuable IT details, I'm completely certain Apple enjoys the
titillating buzz surrounding its upcoming releases...
I think it's one element in selling over 20 million phones in two weeks, for instance.
So, the penalty itself is harsh to protect the IT, but I'd assume it's enforced gently to permit the buzz.
As an Apple shareholder, I would like the court to nullify the confidentiality agreement. Allow GTAT to release all the details and facts of the contract.
Their business plan might have been simply to break even or lose on the deal while apple helped them build infrastructure in the hopes that further money would come down the line.
There is a lesson that was taught to me by a very successful investor, (he wasn't a Warren Buffett, but still very impressive). - When you set out to make a profit, don't take it all for yourself, leave something for the next guy. The 'next guy' remembers what you did and he will want to deal with you again.
Really? So what profits have Apple generated so far from this supply contract with GTAT? You are easily hanged by your own arguments. Why don't you just come out and say that you don't like Apple, period, and at least be credited for your honesty rather than pretend to present a reasoned argument?
I'm not interested in their justification because there is none.
The fact is these GT Advanced people are giant-sized idiots and the SEC and their state's Attorney General should be very interested In what they've done.
As an AAPL shareholder myself, there would be no benefit to Apple having the details of privately negotiated contracts revealed. What in the world are you thinking?
GTAT executives are CROOKS and FRAUDS.
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAhahahahahahahahahahahahahahahahahahahahaha <deep breah.......> HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAhahahahahahahahahahahahahahahahahahahahaha
I'm not interested in their justification because there is none.
The fact is these GT Advanced people are giant-sized idiots and the SEC and their state's Attorney General should be very interested In what they've done.
Make sure you don't apply for any job as a diplomat. There are always 2 sides, and the measure of a persons intelligence is very related to their ability to listen to anothers view.
Apple basically had wishful thinking of how much sapphire they could get made in America for a certain price. GTAT execs might have known it wasnt entirely possible. They knew the contracts would bump their share price and shareholder value in the short run at least.
Their business plan might have been simply to break even or lose on the deal while apple helped them build infrastructure in the hopes that further money would come down the line.
Oh, I'm pretty sure that the GTAT brass had a very good idea how easy or difficult it was to fulfill the contract terms. That is a natural problem with the corporations: how to make sure that the executives have the stockholders' interest in mind and not their own. The CEO basically threw his stockholders in the ditch when he saw the bonanza he will get from 'scheduled' stock sales. You could even be charitable and say he didn't set out to willfully defraud the stockholders but a positive integer followed by many zeroes has a way of changing the way you view the risks ahead of you.
Perhaps the former CEO was right: those jobs are gone (overseas) and won't be coming back.
Just because stupidity or incompetence may play a major part in this story does not excuse anyone from having possibly broken both the law and the terms of their contract with Apple.
I'm just curious where this whole defective product portion you keep talking about comes into play? I haven't seen that published anywhere yet.. Can you tell me where you've did discovered gtat's products were defective? That's newsworthy if accurate.
If the product was not defective Apple would have sent GTAT the final prepayment of $100M
Apple never sent the final prepayment because the product was not up to Apple's standards.
The final prepayment was scheduled for September. If the product was not defective Apple would have been buying BILLIONS of dollars worth of sapphire this year and GTAT would not be bankrupt. That is why GTAT wants to shut down the sapphire plant completely. Please understand that GTAT has NEVER mass produced sapphire. In the past they made sapphire machines but never mass produced sapphrie product.
You sound like a small investor who got burned and lost money on GTAT stock.
Make sure you don't apply for any job as a diplomat. There are always 2 sides, and the measure of a persons intelligence is very related to their ability to listen to anothers view.
Other than "Apple lied to us then held a gun to our heads and made us sign the contract", there is really no "other side of the argument".
Just because stupidity or incompetence may play a major part in this story does not excuse anyone from having possibly broken both the law and the terms of their contract with Apple.
Don't get me wrong, my opinion is that GTA messed up here
While i actually agree with you, neither of us are privy to the exact dealings and interactions, so without having the full story, or being directly involved, I am interested in other peoples views, maybe they might have something to say that might make me think a little different, or maybe they will make me more sure of my views.
Not that it's gone unnoticed, but this does nothing to help the idea of bringing manufacturing back to the US. If this company is any indication (a con job based on a superficial reading of the facts so far), why would any outfit like Apple or the others be willing to have components made in America? Not to mention the tax incentives the state of Arizona gave to lure the investment and building of the plant which, what, is presumably going to just sit there while employees now have to the look for work.
Perhaps the former CEO was right: those jobs are gone (overseas) and won't be coming back.
Oh those jobs are gone all right. The factories might come back, but the jobs won't ever.
Other than "Apple lied to us then held a gun to our heads and made us sign the contract", there is really no "other side of the argument".
I can imagine you on jury duty…
Court Clerk :"All rise"
You : "He's guilty! lock him up. Look at him, he even looks guilty. Right, anyone fancy a pint?"
just poking fun….