AAPL withheld $139M in payments from GTAT prior to bankruptcy

Discussion in 'Stock Market Forum' started by downloads, Oct 8, 2014.

  1. downloads

    downloads Well-Known Member

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    Some very interesting news about GTAT from the WSJ.

    http://online.wsj.com/articles/shattered-screen-dreams-at-gt-advanced-heard-on-the-street-1412714363

    Obviously this must have a lot to do with the recent GTAT bankruptcy fallout. On the one hand, AAPL withholding payments is a huge loss of revenue for the GTAT, who probably did not have very many customers. Such a hit in revenue would cause them to file Chapter 11. But I feel like they were in trouble even before AAPL decided to do this.

    My guess is that there was some sort of supply constraint issue. Apple wanted sapphire, and they agreed to loan GT $578M to jumpstart production. But they couldn't deliver. The fact that they were $125M below the trigger point seems like Apple really had faith in them but ultimately they could not keep up with their demands.

    If I were Apple, I would try to acquire them in bankruptcy while they're on the cheap.
     
    Last edited by a moderator: Jul 8, 2016
  2. troutski

    troutski Guest

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    I mean, none of this really surprises me. If you get in bed with only one company, then you're going to wind up in a world of financial pain when something goes wrong. Since the Sapphire screens didn't make it into the iPhone 6, GTAT took a major hit from that fact, and small amounts of Sapphire screens in a limited number of devices doesn't make for a good situation.
     
  3. Nho Huynh

    Nho Huynh Guest

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    Ѕо Аррlе арраrеntlу "snubbеd" GТ Аdvаnсеd Тесhnоlоgіеs bесаusе а соmрlеtеlу un-substаntіаtеd rumоur fаіlеd tо mаtеrіаlіzе аs thоsе whо реddlе іn suсh rumоurs thоught іt wоuld. Ваsеd оn thіs rumоur, thе соmраnу's stосk wеnt uр, оnlу tо соmе сrаshіng dоwn аgаіn оnсе thе sресulаtіоn рrоvеs tо bе fаlsе. Аnd thіs, sоmеhоw, іs thе fаult оf Аррlе. Іt соuldn't hаvе аnуthіng tо dо wіth tесh sіtеs gоrgіng thеmsеlvеs аt thе buffеt оf thе Аррlе rumоur mіll іndustrу аnd rеgurgіtаtіng сlісk-bаіt hеаdlіnеs wіth lіttlе оr nо bаsіs іn fасt. Соuld іt?
     
  4. downloads

    downloads Well-Known Member

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    That's not the situation at all. Apple was relying on GTAT, and GTAT could not deliver on their promises from their own end. Apple was waiting for GTAT to produce sapphire displays for them but they could not produce them. If you don't deliver your product, then your customer is not responsible to pay. In this case, it was their only single customer.

    Apple didn't "snub" GTAT. GTAT failed to deliver for Apple.
     
  5. cameronpalte

    cameronpalte Well-Known Member

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    They probably were in trouble before they filed this bankruptcy. However, with that said I feel like if the payment from Apple was a fault of Apple or something that played a much more major role in the bankruptcy, then they would have pursued the money long before they filed for a bankruptcy.
     

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