The unanticipated drop in stock price of GT Advanced Technologies by over 90 percent and the company’s bankruptcy, signals unexpected parting of its way with Apple. According to analysts the supplier mostly depended on Apple for over 80% of its 2014 revenues .
This sudden shock may ruin GT Advanced Technologies business which manufactures the quality sapphire glass for Apple products. GT Advanced Technologies owes $350 million to Apple taken as a loan to build a facility in Arizona for manufacturing sapphire . The company is also getting a big share of revenues from production of solar panels, generated $31 million in first six months of 2014. The amount if compared to expected revenue up to $700 million from Apple products seems just a tiny fraction.
GT Advanced Technologies, is in no position to pay off $350 million to Apple.Gilford Securities reported that Apple may ask the company for force early payment of loans. The report also foresee a rapid decline from $333 million to $85 million in cash reserves of company during the Q3 2014.
So far the cause of breakdown between the two tech giants is unclear.
The agreement between GT Technologies and Apple to manufacture sapphire was signed on Nov. 4, 2013. The company’s stock got a big blow of 35% in September when Apple revealed its plans of not using sapphire in the iPhone 6. However Apple is still stick to its plans of using sapphire in the Apple Watch.