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Apple Sapphire Glass Supplier GT Advanced Files For Bankruptcy
mrspoonsi writes GT Advanced Technologies is filing for bankruptcy. In an announcement on Monday, GT Advanced, which makes sapphire displays that many investors hoped would be in Apple's newest iPhone, said that it was filing for Chapter 11 bankruptcy. In early September, shares of GT Advanced got crushed after the company's sapphire displays were not in the latest version of Apple's iPhone 6 and 6 Plus. GT Advanced, however, signed a multi-year agreement with Apple last November to supply the company with sapphire material. That agreement included a $578 million prepayment, which GT Advanced is set to repay Apple over a five-year period starting in 2015.
You forgot:
6) Apple obtains GTAT through bankruptcy proceedings in lieu of being repaid for cheaper than what it would have cost before #2
7) Apple vertically integrates a component of supply chain using change it found in their lobby's couch cushions.
Honestly give me the $578M... I'll burn through it in a matter of days.
Of course what I'd be spending it on is probably quite different than what they did (if they spent it at all... could be scam)
Just an off the top of my head guess:
Get large, lucrative, long term contract with Apple to deliver a component. Get large advance to get production up to speed. Spend all of it (or more... high tech factories are expensive) ramping up said production only to have your first expected large order get pushed to "undefined future". Realize you didn't budget for that and file bankruptcy.
I've seen posted that this isn't the biggest part of this company's business plan but I could easily see a company like this 'betting the farm' on this deal and screwing themselves in the process. Happens a lot. Bankruptcy is also a variety of different things so this isn't them being broke or going out of business necessarily but an acknowledgement that they are unable to fulfill their current level of liabilities. Apple may lose a bit or a lot on their investment but not really a big deal due to a combination of A) They more than anyone else in the world right now can afford it. B) They probably haven't lost as much as you think. Apple made the choice to not include this component in the '6. I'm sure they were aware of such an issue when they made such a decision. Just beans being counted.
get a $578M prepayment and go bankrupt in 10 months?
While many would suspect foul play here, I'm willing to bet it costs more than a nickel or two to ramp up to support one of the most popular electronic devices in existence.
I work in BNCT research and some guys from GT advance have presented at a couple of recent conferences. Of interest to us was their 'hyperion' (yes, like Borderlands) accelerator they'd been developing. Huge amounts of beam current from a fairly compact and easily maintained package. They were planning on using it to peel off very thin layers of sapphire via ion implantation, we could use it as the first stage of a neutron generator and I'm sure there are tons of other industrial applications. The senior guys I met seemed very good - proper engineers with the minimum of marketing bullshit. I think they'll do ok even if this is a pretty major set back.
"Physics is to math as sex is to masturbation." -R. Feynman
Probably best not to blame Solyndra on Obama since Bush started it.
I see. So let me summarize your logic:
Bush looked at Solyndra, but didn't invest.
Obama looked again, and decided to invest.
Therefore it is Bush's fault.