Tyler Durden: Those wondering why Apple’s favorite sapphire glass maker shockingly went from a market cap of $1.5 billion to $0 (net of 45% of the market cap being short, trying to cover and pushing the stock price briefly just above $0.00) in the span of milliseconds, such as “smart money” investors Fidelity, Blackrock and Wellington which collectively owned almost 30% of the company.
… will not get an answer for a while, and certainly not from its public filings, all of which provided a picture of a company that was apparently in good health and worth well over $1 billion, thus making one wonder how much 10(b)-5 fraud there is in this bankruptcy.
One certainly won’t get it from Stifel’s Sven Eenmaa or Cowen’s Jeffrey Osborne, both of whom had the stock at a “Buy” as recently as Friday with a $20 and $18 price target.
The “recent developments” section of GT Advanced Technologies Inc’s (NASDAQ:GTAT) August 8 10-Q filing does have a little more but also nothing of alarm:
Since the Company’s subsidiary, GTAT Corp. entered into the Master Development and Supply Agreement (“MDSA”), facility lease and related agreements with Apple Inc., on October 31, 2013, the Company has expended significant capital resources in order to fund the establishment of its sapphire growth and fabrication facility in Mesa, Arizona (“the facility”). During the three and six months ended June 28, 2014, the Company incurred significant costs in connection with (i) the purchase, installation and qualification of production equipment and related production processes, and (ii) inventory losses and production inefficiencies to date at the facility. Such inventory losses and production inefficiencies are discussed in additional detail below within Note 2, Significant Accounting Policies under the heading Sapphire Production Ramp Up Costs. The capital resources expended in connection with the purchase and installation of production equipment and the costs incurred in commencement of operations have had a significant impact on our liquidity and financial results.