Due Diligence for Investors in GT Advanced Technologies, Inc.
We linked an article written a year ago by Casual Analyst and posted on Seeking Alpha so that the investor reading here can get an historical perspective regarding the company’s relationship with Apple (NASDAQ: AAPL) and the road to bankruptcy. Another Seeking Alpha article by Eric Jhonsa, also linked below, details recent developments that are impacting the company right now. We have also linked the Barchart.com analysis which is showing a fairly strong “buy” recommendation. In the prelude to a Research and Markets report we direct you to (the full report costs $2500); you will read that the market for sapphire glass will grow nicely over the next 4 years and that GTATQ is a key supplier.
Our View: A year ago GTATQ was a NASDAQ listed company with $1.5 billion in assets and a share price of $11. Their fortune was inextricably attached to an agreement they had with Apple (NASDAQ: AAPL) to supply “sapphire glass” for Apple products. Now, GT Advanced Technologies is a company operating in bankruptcy under Chapter 11 as a “debtor in possession”. That means that the company is trying to reorganize its debt and operations while staying in control of its assets instead of the court managing them.
The company’s share price has appreciated over 600% in the past month. This is most likely due to the three big changes detailed in the Eric Jhonsa article. The CEO, Tom Gutierrez has been replaced, the company has set a target to reduce costs by 40% and they have secured $95 million in “debtor in possession” financing.
GTATQ had placed all their eggs in the Apple basket and the whole thing fell apart. Apple had advanced them large sums to develop sapphire glass for Apple products creating the potential for a huge bonanza. GTATQ will eventually wash the Apple debacle out of their company, move forward and drop the Q off their ticker symbol. The current price will seem like a bargain a year from now.
Seeking alpha – Casual Analyst – October 9, 2014
Seeking Alpha – Eric Jhonsa – August 31, 2015
Barchart.com – analysis – September 22, 2015
Research and Markets – Research – July 2015
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