GT shares plunge as Apple taps other source for new iPhone display
Reuters
7 hours ago
By Saqib Iqbal Ahmed
NEW YORK, Sept 9 (Reuters) - Shares of GT Advanced Technologies Inc plunged in their heaviest-ever trading day on Tuesday after Apple Inc said its new iPhone 6 would not feature screens made with GT's sapphire glass displays.
GT's stock began falling abruptly in early afternoon trading as Apple's latest product launch event was underway in Silicon Valley. By the close of trading, it had dropped 12.9 percent to $14.94 on record volume of 37.7 million shares.
Some GT options due to expire later this week also spiraled lower.
"There was a chance that Apple would announce Sapphire displays in their new iPhones, and (Apple) has decided not to go that route," Ophir Gottlieb, chief executive officer at Los Angeles-based Capital Market Laboratories LLC, said.
A GT spokesman was not immediately available to comment.
GT, which makes equipment for consumer electronics, power electronics, solar and LED products, said last year it would partner with Apple to build a plant to make sapphire screens for iPhones and iPads. In its latest quarterly report, the company said it had "incurred significant costs" in connection with the Mesa, Arizona, plant's development.
Under the deal, dated last October, GT granted Apple an exclusive license for certain applications of GT's sapphire glass technology, according to the filing with the U.S. Securities and Exchange Commission. The deal also placed restrictions against GT selling sapphire for use in certain applications. At the same time, however, Apple had no obligation to purchase any of GT's sapphire glass.
Moves in the stock have been linked to expectations involving the use of GT's glass displays by Apple since November 2013, when shares rallied sharply after it first won a manufacturing deal with Apple.
Since then, the stock has gone through ups and downs depending on expectations for GT's inclusion in Apple's new products. The stock sold off in July after an analyst questioned how much sapphire glass would be used in the new iPhone.
In addition to the stock's plunge, several strikes of GT call options due to expire later this week lost nearly all their value.
For instance, the 17.5 calls that expire on Friday, which opened the day at 97 cents a piece and were near an at-the-money position before the news, dropped 92 cents to end at 5 cents each, losing 95 percent of their value. They were the second-most active call options on the day, with 3,715 contracts traded against existing open interest of 2,374 contracts.
GT was not left completely out of the Apple product launch, however. It will supply the screens for two of the three versions of the Apple Watch, which was also announced on Tuesday.