Apple’s sapphire manufacturing partner GT Advanced has had a hard time meeting the milestones it agreed to, but executives have profited off the deal by selling their stocks at high prices, as investors were positive that there would be a sapphire iPhone this year.
The Wall Street Journal’s Daisuke Wakabayashi has already uncovered how GT Advanced’s CEO Thomas Gutierrez set up a pre-arranged plan to cash in by selling GTAT stock before the Apple media event in September.
As it turns out, it wasn’t just him: another high-profile executive, Daniel Squiller, GT Advanced’s chief operating officer and the point man at the Mesa facility, did the same. After seeing that GT wouldn’t meet the technical and financial milestones it agreed to with Apple, Squiller set up a plan to sell shares and cashed in almost $2 million before GT Advanced filed for Chapter 11 bankruptcy protection last week.
We all know that Apple had agreed to loan GT Advanced $578 million, as well as buying the Mesa plant and establishing it as the company’s exclusive sapphire manufacturer. The loan was scheduled to arrive in multiple instalments as GTA needed to meet certain criteria along the way.
The third payment, $103 million, was due in February — remember that February report of the Mesa plant preparing for a production onslaught? — but it didn’t come until April. The last instalment of $139 million was withheld by Apple despite being due in April, GTA’s filings reveal.
GT Advanced execs have sold shares at prices ranging from $15 to almost $21 per share. Since the company announced its bankruptcy, shares have dropped more than 90%. They traded at 43¢ today.