“Chris Caso of Susquehanna Financial Group was out this morning reiterating a “Positive” view on Apple (AAPL) shares, and raising his price target to $120 from $115,” Tiernan Ray reports for Barron’s.
“Caso, interestingly, also took a moment to comment on the plunge in shares yesterday of Apple supplier GT Advanced Technologies (GTAT), whom analysts speculate may have filed for bankruptcy after Apple called in a loan,” Ray reports.
According to GTAT’s latest 10-Q filing, the facility in Arizona is owned by an AAPL affiliate, and was leased to GTAT for the purpose of sapphire manufacturing. In addition, the prepayment made to GTAT was structured as secured debt, with the sapphire manufacturing equipment pledged as collateral. Finally, AAPL has already been granted a license for certain sapphire related IP by GTAT, and AAPL has the right to purchase a license for additional IP at AAPL’s option. Based on these details, following GTAT’s bankruptcy, we would expect AAPL to simply take possession of the equipment that acted as security for the prepayments (particularly since AAPL owns the building), and for AAPL to exercise their option to purchase any sapphire IP that they haven’t already licensed. – Chris Caso, analyst, Susquehanna Financial Group
Read more in the full article here.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]
Related articles:
Apple to provide debtor in possession financing to GT Advanced? – October 7, 2014
Investors stunned over GT Advanced bankruptcy filing – October 7, 2014
GT Advanced files for chapter 11 bankruptcy court protection – October 6, 2014
Apple and GT Advanced rampup sapphire production in Mesa – August 11, 2014
GT Advanced expects sales of sapphire production tools to boost profit; shares surge – August 5, 2014
Apple and GT Advanced open second sapphire plant in Salem, Massachusetts – June 19, 2014
Apple patents method for embedding sapphire displays in LiquidMetal device chassis – May 27, 2014