GT Advanced Technologies Inc (OTCMKTS:GTATQ) continues to trade strong in the mid $0.40 range. The stock reached an all-time low of $0.305 a share in October shortly after it was delisted from the NASDAQ on October 16.
GTATQ recently jumped when the Company won court permission to wind down its sapphire manufacturing operations after lawyers reached a settlement with Apple Inc. (NASDAQ:AAPL). The settlement it is hoped will save GT Advanced millions of dollars according to their lawyer.
Under the proposal, GTATQ will retain intellectual property rights and will not make any claims against AAPL. The company will retain the furnaces from its Mesa, Arizona, sapphire operations and be free to sell them to anyone. Apple will have a $439 million claim against the furnaces and will be paid solely through the furnace sales with no other claims made by Apple.
It’s been a miserable last few months for the Company; it all started in the 2nd week of September after Apple unveiled the new iPhone 6 and iPhone 6 Plus, which did not include GT’s sapphire material. This wiped out about 25% of the Company’s total market capitalization and unfortunately it was just the start of the collapse.
On October 6 GTAT announced that it had commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. GT expects the court will authorize the company to continue to conduct business as usual while it devotes renewed efforts to resolve its current issues and develops a reorganization plan.
The news wiped out the remaining 90% of the Company’s market valuation and a stock that was trading for $20 a share on the Nasdaq stock exchange a few months ago is now on the pinks trading for pennies.
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GT Advanced Technologies is a leading diversified technology company producing advanced materials and innovative crystal growth equipment for the global electronics, solar and LED industries. Our technical innovations accelerate the use of advanced materials, enabling a new generation of products across this diversified set of global markets. Our technologies help our customers lower the cost of manufacturing providing a high return on investment.
Our expanding foundation of products reflects our strategic commitment to driving growth opportunities for the company and in our continued investment in R&D.
Today, leading manufacturers around the world rely on the proven performance and reliability of our products, the unmatched support provided by our global service professionals and our role as a strategic partner.
GTAT products include Polysilicon Production Equipment and Services –A suite of polysilicon production equipment and services, including the SDR™ Siemens-based reactors and hydrochlorination TCS technology and equipment. PV Ingot Growth Systems – Building on our DSS™ crystal growth market leadership, we are developing our HiCz™ monocrystalline system that will deliver higher performance material for next generation wafers and cells.
Power Electronics – Leveraging its deep expertise in crystal growth technologies, GT Advanced Technologies has developed a silicon carbide sublimation furnace to address the growing needs of the power electronics industry. Sapphire Production Solutions – GT’s expanding sapphire product portfolio delivers the total solution for high volume sapphire manufacturing.
In the bankruptcy release GTAT indicated that as of September 29, 2014 it had approximately $85 million of cash. In addition, it is now seeking debtor-in-possession financing, which, once obtained, would provide the company with an immediate source of additional funds. These funding sources will enable GT to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of employee wages and other obligations.
“GT has a strong and fundamentally sound underlying business,” said Tom Gutierrez, president and chief executive officer of GT. “Today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.
Conclusion: GTATQ is falling in early trading Monday. The stock still commands significant attention from small cap investors. Anyone who was around for the epic AAMRQ or FNMA post bankrupt runs knows that this one is far from over and is very capable of making 1000% moves while on the OTCBB.
Currently trading at a $68 million market valuation GTATQ is a stock to watch; now that it’s on the pinks with massive investor interest anything is liable to happen here.
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Disclosure: we hold no position in GTATQ either long or short and we have not been compensated for this article.