DeZwarteRidder schreef op 7 oktober 2014 08:15:
GTAT Bankruptcy Filing Fallout
Posted by: Matt Margolis October 6, 2014
Dear Forensics Community,
Today’s chapter 11 bankruptcy protection filing from GTAT came as a complete surprise to me today. Over the past several months, various operational issues occurring inside Mesa, AZ have been plaguing the company and were discussed during GTAT’s Q2 conference call. GTAT’s management reiterated guidance on August 5th and was confident that GTAT would receive the final prepayment from Apple by the end of October.
It is evident now that GTAT did not meet the required metrics to receive the final prepayment from Apple. In addition, GTAT burned through $248m of cash during the past two months leaving it with just $85m of cash as of September 29th.
Filing for chapter 11 bankruptcy protection simply means that a company is on the verge of bankruptcy, but believes that it can once again become successful if it is given an opportunity to reorganize its assets, debts and business operations.
GTAT at this point only has $85m of cash and needs to preserve cash, raise cash and reorganize its business operations to cut costs. GT’s cash burn over the past two months is not sustainable and the company was forced to file chapter 11 to stop the bleeding and give the company options.
GTAT’s shares very likely could be delisted from the Nasdaq as a result of today’s filing. I will be working through documents and figuring out the possible next steps. GTAT’s bankruptcy filings indicated that the company has over $1B of assets and $1B of debt. I will be going through the filings to see if there is any potential value left that shareholders might be able to salvage from today’s news.
Matt