What Happened With GT Advanced Technologies Inc (GTAT)?

wall-street-etfTyler Durden: Before the Fed’s minutes unleashed the biggest stockmarket rollercoaster seen since the summer of 2011, by far the most notable event was Monday’s Lehman-like bankruptcy of Apple’s sapphire glass producer, GT Advanced Technologies Inc (NASDAQ:GTAT), which without warning, went from a market cap of $1.5 billion to zero in the span of seconds after a market trading halt.

Much to the shock and dismay of its shareholders, none of whom had expected any bad news, let alone a bankruptcy filing, the company decided to add insult to injury when instead of at least providing an explanation why over a billion in equity had evaporated, all it had to say was this:


GTAT is facing a severe liquidity crisis due to circumstances that will be more fully described at the hearing on the First Day Pleadings.

The first day pleadings were today and everyone was eagerly looking forward to the biggest instant repricing of risk/value since Lehman bonds went from 80 to 8 in one weekend…

… in fact this was worse than Lehman – at least there one knew what happened. Instead, in addition to the above mentioned insult and injury, what everyone – and especially the shareholders – got was nothing short of a slap in the face, when the company argued on Thursday it could not reveal why it filed for bankruptcy and asked a court to keep crucial documents sealed, something even Reuters dubbed a highly unusual move that may keep investors in the dark about its unexpected and very spectacular implosion.

The reason why GTAT shareholders have zero rights when it comes to the postmortem of where their money went? Everyone’s beloved Apple. As a reminder, GT Advanced inked a deal last year with Apple “that involved outfitting an Arizona factory to make sapphire exclusively for the iPhone maker. Apple, which zealously guards the secrecy of its product pipeline, has been known in general to place strict confidentiality requirements on its many suppliers.”

And it is this deal that suddenly shrouded everything having to do with GTAT in absolute secrecy the company told the U.S. Bankruptcy Court it was barred from disclosures because it was “tied up in knots” by a confidentiality agreement. At the first public hearing since GT Advanced’s unexpected Monday bankruptcy filing, a lawyer for the company said the agreement also prevented it from revealing its Chapter 11 game plan.

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