Apple’s sapphire processing plant in Mesa, AZ
The Wall Street Journal has cast some more light on recent reports that Apple’s sapphire supplier had declared bankruptcy earlier this week. According to the Journal’s report, Apple withheld a payment of $139 million from GT Advanced, though currently there’s no indication of why this decision was made.
In another interesting revelation, the Journal also discovered that the CEO of GT Advanced, Thomas Gutierrez, unloaded all of his stock in the company in a sale just one day before the iPhone 6 was unveiled. The device was widely expected to use sapphire supplied by GT for its displays. GT Advanced had enjoyed a rising stock price that had nearly doubled since initial rumors of a collaboration on the iPhone 6 started swirling.
The sale was scheduled back in March, about a month after initial sapphire iPhone rumors first appeared. While it’s true that Apple’s wearable device—announced on the same day as the iPhone—will use sapphire crystal displays, the iPhone 6 and 6 Plus sport only Gorilla Glass covers.
The 9,000 shares sold by Gutierrez the day before the announcement made him about $160,000. The following day, when it became public that GT was not supplying iPhone display covers, the company’s stock dropped 13%. Since February the executive has sold over 700,000 shares, grabbing him over $10 million On Monday, GT shares dropped another 93% after the supplier declared bankruptcy.
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A GT CEO scam?
It feels to me like he had secret knowledge about what his company had done that his fellow shareholders did not have. He sold his stock high and his fellow shareholders bought it from him. Hm, maybe if they knew what he knew they wouldn’t have bought this from him. After all it turned out to be garbage.
Seems simple to me. GT either couldn’t produce enough displays or the quality was bad. Apple didn’t pay for the displays. GT CEO knew this was bad news and sold his stock.
and SEC will visit him soon…I can see a black hand in this unloading stocks.
It’s not insider trading. There was never any announcement that GT would in fact be producing anything for the iPhone and this last sale was already booked in March, long before they could have known the company would go into bankruptcy.
Or did he execute his sale based on information that he had as an insider that his fellow shareholder did not have? Someone bought that stock from him. That person was screwed. Insiders with secret knowledge need to be extremely careful about screwing owners of the company.
I was wondering why Apple would suddenly choose to build their own huge sapphire plant right after partnering with a company to do sapphire. Now we know, Apple didn’t think they were up to the task so they created their own backup plan just in case.
They say that the iPhone 6 missed out on sapphire displays by mere weeks. I’ll bet GT was suppose to have those ready for Apple and when they didn’t, Apple cut them off. Which caused the GT CEO to cut bait. Meanwhile, Apple’s own plant has been hard at work making displays for the Watch.
Apple doesn’t have it’s own sapphire plant. So, you are wrong. They partnered with GT on a plant, basically saying Apple will pay for it, GT will run it, and Apple gets the output, but it is wholly owned by GT, not Apple. GT just paid for it using a huge $500 million pre-payment from Apple…
Actually Apple owns the property and the building and they lease it to GT. The pre-payments made by Apple were to get the equipment built and installed. Part of the deal was that the equipment would be used as collateral if something were to go wrong … So basically, it is Apple’s plant, at least until GT can deliver the sapphire.
I stand corrected. Apple does own the land and factory, but it was being run by GT.
Sounds like Apple is trying to cut out the middle man here, they paid for a company to set up everything, and is holding back paying them, making the company go bankrupt, then they will go in and put their own guys in place and make the displays themselves.
Like I said 6 months ago. Sapphire screens were a smokescreen from Apple. I don’t think they ever intended to use it on anything but touch id. The screen on my iPhone 6 is fantastic, and even after using it all day the screen stays smudge free. Sapphire smashphire.
The point of a sapphire display isn’t to avoid smudges or anything. It’s about durability against scratches and breaks. iPhone displays have always been pretty smudge-free.
When it comes to breakage, sapphire has no advantage over Gorilla Glass 3. From what I’ve read, it’s actually more brittle. And all you tech bloggers were so sure Apple was going to use sapphire even though you had no evidence to show otherwise.
Sapphire is more susceptible to breakage than current screen, so not sure why you think they’d use them for phones.
As others mentioned, sapphire is not a good material for largish screens. See http://time.com/3377972/why-apple-didnt-use-sapphire-iphone-screens/ for a more thorough discussion.
I 100% guarantee that there is no Corning Gorilla Glass on the iPhone 6. It is still illuminosilica but not the branded version produced by Corning. Trust me on this one. Guaranteed
Bringing new high tech jobs to America!….or Nah!
Unless he’s a complete fool, I would assume GT’s CEO cleared the stock sales through an attorney first. Even so, he clearly had knowledge almost no one outside the company had, and that smells like something illegal. At the very least, he lacks ethics. My guess Apple is pissed at the company for missing deadline due to QC issues and we’ll soon see the Gutierrez gone. Remember, Mr. Cook is a genius at operational and delivery systems management. Clearly, Gutierrez ain’t.
I am disappointed that the richest company in the world would stupe this low to destory a small American company.
Please explain, how exactly did Apple destroy this company?
Don’t be an idiot. Read the article. Apple bankrolled the company. The company screwed up badly, probably costing Apple millions. Apple is now trying to get it’s investment back. You’re complaining about the capitalism. Incompetence has its consequences.
You see what happened here? 90% loss in a day? this is what you get with Globalization and multinationals that just dont care what so ever. Good citizen bullshit! Tim Cook should be hung!
STFU. Think before you troll, dude.