Chelle, MM and the others here presented the long case for this company. Indeed, the picture painted was very bright. While I did try to temper my optimism, my own posts certainly reflected my strong belief in the company. Unlike many, I believe that there is some value to certain stock message boards; however, that cannot be the sole source of information. I enjoyed Matt's research as much as the next person, but there have always been a high number of shares sold short. While this could be some form of arbitrage, there is a good likelihood that some really isn't. Given the high short percentage, there is a strong story against the company as well.
It is important to try and gain as much information as possible about the company. It is also important to realize that this is a small cap company and prone to wild fluctuations and risk. Banmate probably explains this better than most people on this board. Briefly, he states that only a small percentage of your portfolio should be invested in a company like GTAT with the rest going into larger safer companies.
It is impossible to know what the future holds for GTAT. It is entirely possible that this is just a bump in the road and that Apple uses the sapphire produced in its Mesa plant as a panel covering for future iphones, the iwatch and numerous other applications. It is also possible that GTAT's solar technology takes off.
There is an important lesson in Banmates words (one that I forgot in the exuberance of the stock price).-only invest a small portion of your portfolio in a small cap stock. I hope my statement and the brief paraphrasing of Banmates helps a few people out there.
That is probably the only way to know definitively. However, my long held belief may be getting in my way. For quite a while, I have thought that Apple would likely go with some combination of sapphire and (most likely) GG. This statement seems to fit in well with my belief. So, my shock level isn't quite as high.
LOL. And, the market has never misread anything? Dang, I wish I was around to sell you some AAA subprime mortgage securities back in 2007.
GTAT is still under Apple's cone of silence. So, they aren't likely allowed to respond.
The position taken by Cali and kelinheller seems to be that it is a mix. The mix could very well incorporate both GG and sapphire. In that circumstance, it isn't sapphire nor is it GG.
Actually, that is a really good idea. If you hit the right person, they would likely know the material used to fix the screen. There could very well be a different procedure for GG as compared to sapphire or sapphire mix.
Well, that and the camera lens on the back. Did Apple specifically say they were using Gorilla glass or did they say ion-strengthened glass? Everything I have read indicates iion-strengthened. Did Apple specify if it was a chemical modification process? Or, did they say they were swapping out Sodium for Potassium ions? The term ion-strengthened glass could mean quite a few things; not just GG.
That doesn't help. If they never mentioned Gorilla Glass, why would they specifically mention sapphire? Given the terminology similarities, we are basically at the same spot. People assume that it is GG because of history. But, the terminology gives Apple a certain amount of flexibility.
To me, the terminology Apple used is strange. Ion-strengthened glass could mean two different things. We could be talking about a chemical ion exchange, which appears to be the technology used by Corning or we could be talking about the hyperion ion implanter based technology that is likely offered by GTAT. Or, we could be talking about some combination of both. As I had other things to do, I was not listening to the Apple product launch. From what Ive read, am not sure that would have brought much light to the issue.
Wasn't the Iwatch confirmed with sapphire? If that product takes off, wouldn't a certain amount of high quality sapphire be required for production?
Everything I have read on here seems to indicate that Apple used the term ion glass. Admittedly, that terminology makes one think it is gorilla glass because the definition fits. However, GTAT has a similar technology associated with sapphire. So, the question is (if it is Gorilla Glass) why wouldn't apple just say GG as opposed to ion-strengthened glass. GG has a track record with the iphone and people would know it well. Sapphire would be an unknown to most people (except those thoroughly immersed because of certain positions they may hold). Your explanation makes some sense in that context.
But, how did you manage to confirm this? Until the phone comes out or Apple clarifies, it is impossible to know one way or the other. Just my opinion on this.
If we just say, you are right! You are God's gift to investing. Warren Buffett and Charlie Munger are inferior in every way possible when it comes to investing compared to you. The stock price has dropped; you are clearly very pleased by this event. Now, that it has. Will you finally go away?
Cali has been here a long time as has Chelle. Matt Margolis used to post here and that was quite the treat. I've been here a long time as well. Sadly, the boards content has gone down a bit; however, there are still a few good posters out there.
I also don't understand the bit about other cell phone manufacturers launching sapphire phones. Wouldn't that indicate that sapphire demand is going to be increasing within the cell phone space. So, even if Apple decides not to use sapphire, GTAT has a place to go with it. Then (as other posters stated) there is the equipment.
I have no idea how much will be added to iphone costs due to sapphire. With the exception of Apple and a few others, no one knows. The reason why GTAT is so volatile is due to the size of the company, the level of short interest and speculation.
One can safely assume that Apple has done a considerable amount of due diligence on this. Am certain that pricing would have come up. That being said, I doubt a $100 increase in cost unless there is some Apple-devised application that can only be done using sapphire glass. Even in that case, Apple could have decided that people were willing to pay an increased amount. In that scenario, a $100/phone increase would mean little to GTAT.
As far as margins go, it is again speculative. For this quarter, it sounds like an increased amount of equipment sales, which carry a higher margin. This is why the company said it would hit the lower end of its revenue guidance and higher end of its profit guidance. My feeling on Apple is that margins are going to be thinner than other businesses. My best guess is that the Apple business will probably end up with margins around 10% (8-12%). This is not nearly as good as the low 20s, which I have seen floating around. My reasoning for this is that I do think that GTAT had some production challenges that had to be addressed, which likely caused a hit to margins.
As far as the Apple business goes, it is not the reason why I am invested in GTAT. I see that line of business as being low margin but providing reasonably steady capital for GTAT's other more profitable ventures in equipment manufacturing.
The "source" may or (likely does not) exist. "When the facts are revealed?" So, you have no facts to support your conclusion.
111 Fake Street, Beijing China
The Susquehanna river area is beautiful; it goes through an area of PA called the endless mountains. The greatest thing about this area is that it's just a short drive to corning, ny. Just go a bit east on old 17 and you get to corning; I highly recommend the factory tour. And, don't skimp on the glass blowing; it's awesome. Susquehanna seems a strange name for a brokerage; am curious about its headquarters and where it got its start. Perhaps, I could drop by for a visit if I ever head back to the area. Am wondering if there is a bit if a homefield advantage, though. Read the critique but do own dd as far as value.