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.
hmm, so where did you get your financial degree from? no? ok, what about your criminal justice degree? what agency do you work for that gives you your keen incite on whats fraud and what isnt?
I agree with the general consensus here, but here is my most charitable possible interpretation of GTAT's behavior:
They could have genuinely thought they had a realistic chance of success, if not to the letter of the contract then at least to satisfy their partner (Apple). They agreed to Apple's demands for control because they trusted Apple's expertise in manufacturing (or at least managing suppliers), and believed that Apple's vested interest in their success would ensure they would make decisions that would be mutually beneficial (and minimally allow GTAT to remain liquid). Perhaps even 6 weeks before bankruptcy, they could have had a firm belief that Apple would be willing to renegotiate if the alternative was bankruptcy, especially in light of Apple's (allegedly) choice of ill-suited equipment. This would make it possible that their 2015 projections were not a blatant lie. Also, it is likely that lessons were continuing to be learned daily as they were trying something ambitious and new, and sometimes assumptions are proven wrong which drastically alters the outlook for feasibility, whether financially or technically. But I would say misjudgment of Apple's willingness to walk away is most likely, not realizing just how much easier it is for Apple to eat a few hundred million.
Apparently Apple was working with them to try to meet their goal. I don't know why they decided to withhold the final payment (besides the obvious) rather than continue trying. They may have lost confidence in GTAT, or simply realized that the project was overly ambitious and not worth pursuing further. Keep in mind, the payment schedule was implemented for a reason, and it's possible Apple's expectation of this outcome at the start was much higher than 0%. As Apple also signed the contract and assumed risk as well, this was either a calculated risk or a misjudgement of GTAT in some regard, whether technical expertise, ability to execute, or management integrity.
On a personal note, I have coincidentally been doing consulting for a business that builds furnaces for metallurgical applications, including leaded glass. Like GTAT, they are developing new processes and attempting things that haven't been done before. Based on my experience, it is not surprising at all that there could be unforeseen challenges which would drastically alter the schedule or budget. Dropping hundreds of millions on a bunch of equipment before a proof of concept has been developed seems unwise unless the urgency is extreme, the differences from proven methods are indeed trivial, or an acceptable exit path exists should the plan fail. I assume the latter was true for Apple, for GTAT not so much.
Apple fought to get favorable terms and earned them.
GT is actually the one who should be sued because they didn't keep their promise.
They said they would produce a certain amount of sapphire and they didn't.
In other words, the company is a failure. And Apple is right to enforce the terms of the contract that GT agreed to.
Trying to blame the company that actually did things right is low class and inaccurate.
Apple was hurt by GT breaching contract since they could not use the sapphire as widespread as originally intended, affecting the success of their future products in a hotly contested environment where even the slightest differentiating factors are ever important.
These folks had better watch it.
Apple is one of the last "good guy" companies out there. But even the "good guys" have to pull out their guns to protect their good name when something appeoaches libel such as this.
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.
So? It's still a normal and common function of being an employee. There's no screwing in this. Why should anyone's job be guaranteed indefinitely?
Now if they are shareholders too, then they were misled and that is fraud, and hence the 'screwing'.
hmm, so where did you get your financial degree from? no? ok, what about your criminal justice degree? what agency do you work for that gives you your keen incite on whats fraud and what isnt?
NolaMacGuy! Haha! I've missed you! lol. The comments have been way too repetitive lately, but here you are to shake things up! Haha! I love it!
Nope, no financial degrees here. lol. Or criminal justice degrees. I know, I should have just sat in the corner and let the lawyers and bankers talk it out, but I'm just too damn compulsive. lol. I'm just a guy who likes following tech news. And susequently, investing in tech that I'm told has potential. Luckily, I did not invest in GTAT, but I was close to. Why? Because of assurances made by Tom Gutierrez (GTAT's CEO) in August.
So, in my opinion, however grossly uneducated you may find it to be, I believe (given the facts I've seen) that investors were mislead. Translation for others who don't have financial or criminal justice degrees : the man committed Fraud.
Always entaining to hear from you, Man! Haha! You keep this site interesting!
I wouldn't be surprised if Apple wouldn't let them do that. If GTAT had announced a major loss etc, everyone would have know Apple would not be using Safire in their iPhones.
What would that matter? Sappire isn't in the iPhone's now and they're selling like crazy!!! It has zero effect. It wouldn't have changed anything.
If the GTA executives who cashed in big time on the huge bump up in their stock options that Apple gave them redistributed their windfalls to the line workers I'd have a bit of sympathy for them. Otherwise they are just making themselves and American businesses in general look utterly pathetic and parasitic. Laypeople who keep whining about American jobs going overseas should look closely at what happened here when an American company was giving an opportunity to compete as a partner with the most valuable company in the world. They blew it, big time. Now they want what exactly? Our sympathy? Have they no shame?
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.
I agree it's not evidence, but it does back up his position whereas before it was just comments without anything to substantiate how he arrived at his position.
Has Apple become too powerful? If companies that are being approached by Apple are willing to negotiate themselves into such a bad deal. Perhaps Apple was negotiating harder than what was good for anyone.
Has Apple become too powerful? If companies that are being approached by Apple are willing to negotiate themselves into such a bad deal. Perhaps Apple was negotiating harder than what was good for anyone.
Huh? So you're saying Apple illegally used their power to coerce them into signing a contract?
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.
Sorry you missed the 'implied 'charge 'em' in my 'get a jury of 12' I assumed that was a pretty obvious. That of course also implied 'an investigation is required'. I am obviously getting far to cryptic and/ or subtle!
I beg to differ on my view of how this all went down. Granted Apple may have screwed up on their due diligence but something is rotten in the state of Denmark. Oh, that's an quote from Hamlet by the way. 8-)
It wouldn't surprise me if, in their desperation to beat off better-performing rivals and win Apple's order, GTAT themselves offered up those incredibly stiff conditions.
Always looking to minimise cost and maximise margins, Apple predictably jumped at GTAT's apparent willingness to shoulder financial responsibility for the order. But for my money, the stock trading activities of the top management reveals that very early on, the company was aware of its inability to deliver, if not right from the outset.
A better supplier may well have delivered Sapphire screens to spec and on schedule, who knows?
:rolleyes: So? It's still a normal and common function of being an employee. There's no screwing in this. Why should anyone's job be guaranteed indefinitely?
Now if they are shareholders too, then they were misled and that is fraud, and hence the 'screwing'.
You are wrong IMO. Soli's comment was correct in the context it was made. Meanwhile, enough with the condescension eh? If you can't discuss without insult give it up, i.e. don't roll your f****** eyes at me smart a**. You do realize you are messing with a Mogul Gaberator in Soli don't you? :smokey:
GTAT has a legal obligation to keep investors informed of events that have a material effect on the company. Apple cannot and would not be able to remove that legal obligation through a commercial contract. These guys cashed out when it was obvious it wasn't going well. They ducked their responsibilities to investors. They are in trouble and they know it. Trying to blame their business partner as an evil entity that forced them to sign a bad contract is a truly desperate strategy. These guys are headed for jail and they know it.
I just want to know why the GTAT guy went on record speculating about how Apple would characterize these things (especially when he made such a persuasive case for Apple).
I don't get the "crooks" comments about Apple. A contract isn't valid unless both parties approve the contract and sign it. It was certainly not in Apple's interest to have GTA fail. They needed the product and since the deal did not result in product, this greatly impacted Apple in terms of future products that would have capitalized on the material.
If GTA didn't know how to negotiate a contract; if their leadership was so eager to make a ton of money that they made themselves a totally crappy deal, they need to own up to it. They agreed to the contract before they signed it. Nothing was hidden from them. They had full command of all the details and they knew what their responsibilities were.
If they'd had any common sense, they would have been much more conservative in their promises. They were so swayed by the dream of getting rich that they torpedoed their own company. Frankly, the employees should sue the GTA brass on this one.
I just want to know why the GTAT guy went on record speculating about how Apple would characterize these things (especially when he made such a persuasive case for Apple).
Comments
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.
hmm, so where did you get your financial degree from? no? ok, what about your criminal justice degree? what agency do you work for that gives you your keen incite on whats fraud and what isnt?
They could have genuinely thought they had a realistic chance of success, if not to the letter of the contract then at least to satisfy their partner (Apple). They agreed to Apple's demands for control because they trusted Apple's expertise in manufacturing (or at least managing suppliers), and believed that Apple's vested interest in their success would ensure they would make decisions that would be mutually beneficial (and minimally allow GTAT to remain liquid). Perhaps even 6 weeks before bankruptcy, they could have had a firm belief that Apple would be willing to renegotiate if the alternative was bankruptcy, especially in light of Apple's (allegedly) choice of ill-suited equipment. This would make it possible that their 2015 projections were not a blatant lie. Also, it is likely that lessons were continuing to be learned daily as they were trying something ambitious and new, and sometimes assumptions are proven wrong which drastically alters the outlook for feasibility, whether financially or technically. But I would say misjudgment of Apple's willingness to walk away is most likely, not realizing just how much easier it is for Apple to eat a few hundred million.
Apparently Apple was working with them to try to meet their goal. I don't know why they decided to withhold the final payment (besides the obvious) rather than continue trying. They may have lost confidence in GTAT, or simply realized that the project was overly ambitious and not worth pursuing further. Keep in mind, the payment schedule was implemented for a reason, and it's possible Apple's expectation of this outcome at the start was much higher than 0%. As Apple also signed the contract and assumed risk as well, this was either a calculated risk or a misjudgement of GTAT in some regard, whether technical expertise, ability to execute, or management integrity.
On a personal note, I have coincidentally been doing consulting for a business that builds furnaces for metallurgical applications, including leaded glass. Like GTAT, they are developing new processes and attempting things that haven't been done before. Based on my experience, it is not surprising at all that there could be unforeseen challenges which would drastically alter the schedule or budget. Dropping hundreds of millions on a bunch of equipment before a proof of concept has been developed seems unwise unless the urgency is extreme, the differences from proven methods are indeed trivial, or an acceptable exit path exists should the plan fail. I assume the latter was true for Apple, for GTAT not so much.
So in other words, GT management is simply inept.
No "bad contract" or "bad apple"
Apple fought to get favorable terms and earned them.
GT is actually the one who should be sued because they didn't keep their promise.
They said they would produce a certain amount of sapphire and they didn't.
In other words, the company is a failure. And Apple is right to enforce the terms of the contract that GT agreed to.
Trying to blame the company that actually did things right is low class and inaccurate.
Apple was hurt by GT breaching contract since they could not use the sapphire as widespread as originally intended, affecting the success of their future products in a hotly contested environment where even the slightest differentiating factors are ever important.
These folks had better watch it.
Apple is one of the last "good guy" companies out there. But even the "good guys" have to pull out their guns to protect their good name when something appeoaches libel such as this.
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.
Now if they are shareholders too, then they were misled and that is fraud, and hence the 'screwing'.
NolaMacGuy! Haha! I've missed you! lol. The comments have been way too repetitive lately, but here you are to shake things up! Haha! I love it!
Nope, no financial degrees here. lol. Or criminal justice degrees. I know, I should have just sat in the corner and let the lawyers and bankers talk it out, but I'm just too damn compulsive. lol. I'm just a guy who likes following tech news. And susequently, investing in tech that I'm told has potential. Luckily, I did not invest in GTAT, but I was close to. Why? Because of assurances made by Tom Gutierrez (GTAT's CEO) in August.
So, in my opinion, however grossly uneducated you may find it to be, I believe (given the facts I've seen) that investors were mislead. Translation for others who don't have financial or criminal justice degrees : the man committed Fraud.
Always entaining to hear from you, Man! Haha! You keep this site interesting!
What would that matter? Sappire isn't in the iPhone's now and they're selling like crazy!!! It has zero effect. It wouldn't have changed anything.
I agree it's not evidence, but it does back up his position whereas before it was just comments without anything to substantiate how he arrived at his position.
right... the CEO made a lot of money on this deal and no doubt knew the outcome.
Let them talk. Every time they make this claim, they are saying,
"We were incompetent, and failed in our fiduciary duties
to our employees and shareholders".
So...say it louder.
Huh? So you're saying Apple illegally used their power to coerce them into signing a contract?
[VIDEO]
Sorry you missed the 'implied 'charge 'em' in my 'get a jury of 12' I assumed that was a pretty obvious. That of course also implied 'an investigation is required'. I am obviously getting far to cryptic and/ or subtle!
I beg to differ on my view of how this all went down. Granted Apple may have screwed up on their due diligence but something is rotten in the state of Denmark. Oh, that's an quote from Hamlet by the way. 8-)
Always looking to minimise cost and maximise margins, Apple predictably jumped at GTAT's apparent willingness to shoulder financial responsibility for the order. But for my money, the stock trading activities of the top management reveals that very early on, the company was aware of its inability to deliver, if not right from the outset.
A better supplier may well have delivered Sapphire screens to spec and on schedule, who knows?
You are wrong IMO. Soli's comment was correct in the context it was made. Meanwhile, enough with the condescension eh? If you can't discuss without insult give it up, i.e. don't roll your f****** eyes at me smart a**. You do realize you are messing with a Mogul Gaberator in Soli don't you? :smokey:
I just want to know why the GTAT guy went on record speculating about how Apple would characterize these things (especially when he made such a persuasive case for Apple).
If GTA didn't know how to negotiate a contract; if their leadership was so eager to make a ton of money that they made themselves a totally crappy deal, they need to own up to it. They agreed to the contract before they signed it. Nothing was hidden from them. They had full command of all the details and they knew what their responsibilities were.
If they'd had any common sense, they would have been much more conservative in their promises. They were so swayed by the dream of getting rich that they torpedoed their own company. Frankly, the employees should sue the GTA brass on this one.
I just want to know why the GTAT guy went on record speculating about how Apple would characterize these things (especially when he made such a persuasive case for Apple).
Fear over what Apple would say.