GT ADVANCED TECHNOLOGIES (NASDAQ:GTAT) Executive SELLS A BIG AMOUNT OF SHARES BEFORE THE COMPANY FILED for BANKRUPTCYGT ADVANCED TECHNOLOGIES (NASDAQ:GTAT) Executive SELLS A BIG AMOUNT OF SHARES BEFORE THE COMPANY FILED for BANKRUPTCY
GTAT (NASDAQ:GTAT) were to be given prepayments from Apple (NASDAQ:APPL) amounting to $578 million. This amount was required in order to bring the sapphire plant up to date acting as a loan. However, the transactions were to be made only when GTAT (NASDAQ:GTAT) had fulfilled some requirements as proposed by Apple (NASDAQ:APPL). These payments were to be completed in 4 installments.
However, in February Apple (NASDAQ:APPL) failed to provide the 3rd installment and delayed it until April 2014. Then at the time of the final payment in April the $139 million wasn’t paid and they declined altogether in August. The reason behind the refusal is believed to be GTAT’s (NASDAQ:GTAT) failure to meet Apple’s requirements. However, looking at some insider news, there could be several other reasons.
According to an employee at Apple; the company at first wanted to induce Sapphire glass in their latest smart phones, but they later decided to use Corning Gorilla glass, resulting in a decision that left the GT Advanced Technologies (NASDAQ:GTAT) bankrupt. This was a big order on which they were banking a lot of their operational activities which failed to come through for them.
However, when Daniel Squiller, GTAT’s (NASDAQ:GTAT) second executive saw the condition worsening in May 2014 he thought of selling his shares. According to reports 116,000 shares were sold before the company went bankrupt. These shares were worth $1.95 million where each share was priced between 15.88 – 20.08 dollars when he sold them. GT’s CEO also sold his shares worth 160,000 dollars just a day before Apple (NASDAQ:APPL) announced its change of plans.
However, after the bankruptcy, Squiller still holds more than 200,000 shares but their prices have plummeted down to 48 cents each. GT Advanced Technologies has held Apple (NASDAQ:APPL) responsible for its present bankruptcy and repeatedly claims their contract to be “oppressive and burdensome”. The company has filed a court document against Apple for the sake of termination of the agreement between them.
Other than this, the company has also filed a separate document stating “costs of continuing to perform under the agreements constituted an unnecessary drain on GTAT’s resources”. The lawyers for GT (NASDAQ:GTAT) say that the company suffered unbearable losses of a $1 million per day and have requested the court to shut down the facilities in Arizona and Massachusetts which will result in 900 employees losing their jobs.
However, Apple (NASDAQ:APPL) still has the upper hand as it was listed in the 30 largest unsecured creditors and besides this Apple owns the facility which it was leasing to GTAT (NASDAQ:GTAT) for production. Apple has contacted the state officials regarding the reopening of the manufacturing plant and also looks forward to the employees working there.
On the other hand GT’s executives are being filed against by investors for several offences like being “materially false and misleading” and that they “artificially inflated the price of GTAT common stock and operated as a fraud or deceit.”