GT Advanced Technologies Inc (NASDAQ:GTAT)’s stock came down by 11.25% to $15.22 in afternoon trading just after the launch of new iPhones by Apple Inc. (NASDAQ:AAPL) on Tuesday. The reasons behind the plunging of GT Advanced Technologies Inc (NASDAQ:GTAT) stock was the fact that there was no Sapphire Glass in both the iPhones. Discussing the GT Advanced Technologies’s stock and effects of absence of Sapphire Glass in the new iPhones on the company in a program on CNBC, Pavel Molchanov, Raymond James analyst said that absence of Sapphire glass in the new phones is certainly the reason behind the tumble of GT Advanced Technologies Inc (NASDAQ:GTAT)’s stock.
“[…] The company guided to approximately $500 to $600 million of Sapphire related revenue this year almost all of that is coming from Apple. Next year, my, kind of base case assumption was about a billion or roughly double, that assumed that Apple would use Sapphire in at least some subset of the phone, obviously that is not to be, that is certainly disappointing […],” said Molchanov.
Molchanov said that although GT Advanced Technologies’s management never stated with certainty that Apple will use their Sapphire Glass in the upcoming phones, it is still difficult to understand that why the company invested so much in the Sapphire Glass related ventures. He said that Watch’s screen is almost one fifth of the screen area of the new iPhone which means that there is a very little glass needed to the Apple Watch. This shows that GT Advanced Technologies was actually preparing and investing for the Sapphire Glass for the new iPhones.
Molchanov predicted that GT Advanced Technologies Inc (NASDAQ:GTAT)’s stock will face more bad times in the market in the coming days and will go down as the company invested a lot in the Sapphire glass and it will have its repercussions.
Kerr Neilson‘s Platinum Asset Management is one of the shareholders of GT Advanced Technologies Inc (NASDAQ:GTAT), owning approximately 2.5 million shares of the company.