A clerk at a bankruptcy court in Manchester, New Hampshire, has revealed that the GT Advanced Technologies Inc (NASDAQ:GTAT) application for bankruptcy protection will begin tomorrow Thursday 11 am ET. The company will be expected to give details of why it applied for the bankruptcy protection.
GT Advanced Technologies Inc (NASDAQ:GTAT) has been caught between a rock and a hard place. Officials revealed Monday that it has only about $85 million in cash. The company had come into a partnership with Apple Inc. (NASDAQ:AAPL) for the supply of lab-grown sapphire, which many people had expected to be used in making of the iPhone 6 and iPhone 6 Plus screens. However, that wasn’t the case as the Cupertino, California based company used Gorilla glass for the screens for the new iPhones.
Many investors will be keen to know the details of the application. The filing of the bankruptcy protection had seen the stock lose more than 90% of its value, a figure that translated into over a billion in the value of the company shares. Tuesday however saw a slight improvement with the company closing at $1.21, which still means a 51% fall.
The application by the company had come as a huge surprise for investors who had expected the company’s stock to grow. GT Advanced Technologies Inc (NASDAQ:GTAT) had also projected that it would double its earnings this year.
But it seems the company had failed in its part to deliver according to the agreement entered into with Apple Inc. (NASDAQ:AAPL) as regards the supply of Sapphire. There are analysts who have the opinion that it might have been a challenge for GT Advanced Technologies Inc (NASDAQ:GTAT) to produce all the needed sapphire for the production of the iPhones.
“We believe the bankruptcy signals a failure by GT to meet its own objectives with Apple, which we believe will likely weigh on the company’s ability to remain a sapphire equipment or material provider,” Canaccord Genuity analysts said in a note.
However, no details will be known until after the hearing.
This article has been written by Victor Ochieng.