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  • GTAT CEO Under a Magnifying Glass After Selling Company Stock Before iPhone 6 Unveiling

    The day before Apple announced its iPhone 6 and 6 Plus, the CEO of GT Advanced Technologies ended up selling $160,000 worth of his company’s stock, the company which now appears to be struggling due to the lack of sapphire cover on the latest iPhones. The cash out which took place on September 8th occurred when shares of GTAT stocks were priced at $17.38.

    After Apple announced the iPhone 6 and iPhone 6 Plus, many were hoping that the devices would feature sapphire screen covers made by GT Advanced. The new iPhones instead featured ion-strengthened Gorilla Glass and shares of GTAT immediately began to drop as a result. The transaction made by GT Advanced CEO Tom Gutierrez left the company even under more scrutiny as the company filed for Chapter 11 bankruptcy court protection, sending shares of the company down over 90% to below $1. The CEO’s $160,000 transaction was highlighted by The Wall Street Journal which noted that the sale date was seemingly uncharacteristic, with “no obvious pattern to his sales.”

    Delving into Gutierrez’ share history didn’t help any either as he didn’t sell any shares of GTAT in 2013 but sold nearly 70,000 this year when it was valued at more than $10 million. He made sales in the first three days of the month in May, June and July. That being said, the sale made on September 8th didn’t follow the same schedule. For its part, Gutierrez claimed the sale was part of a pre-arranged plan established on March 14 of this year.

    Recent trading has shown that the price of GTAT has rebounded slightly, doubling its value from Monday but still far from the $11 range where it hovered after Apple’s iPhone 6 announcement. GT Advanced Technologies stated that it plans to continue conducting business as usual as it attempts to “resolve its current issues.”

    We’ll have to see what the company does from here to make a comeback.

    Source: The Wall Street Journal
    This article was originally published in forum thread: GTAT CEO Under a Magnifying Glass After Selling Apple Stock Before iPhone 6 Unveiling started by Akshay Masand View original post
    Comments 5 Comments
    1. alirz's Avatar
      alirz -
      I think its GT shares he sold. Not Apple's.
    1. Carvensno's Avatar
      Carvensno -
      Quote Originally Posted by alirz View Post
      I think its GT shares he sold. Not Apple's.
      You're right! But the article is about the timing of him selling the stock. The day before the announcement of the iPhone 6 & 6Plus. Knowing the phones weren't sporting sapphire glass and people were betting on them to have sapphire, therefore people would sell off their shares of GT stock on the 9th, thus the company losing money causing the stock to lose value. So this guy sold off the day before making sure he wasn't going to lose money.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      I think alirz was just correcting the headline. And personally, I think that sounds like something to be out under the magnifying glass for... Insider trading much?
    1. Akshay Masand's Avatar
      Akshay Masand -
      Thanks for the catch - the title has been fixed!
    1. roger1079's Avatar
      roger1079 -
      Why is this even news? Insider trading happens all the time in just about every publicly traded company. This guy knew the stock was going to flop immediately after the announcement of the iPhone 6 not having sapphire crystal became public as it seems that is about the only venture this company currently was involved in. He made a sure thing trade at the expense of taking a gamble with the SEC. He obviously lost that gamble since we are reading about it and the investigation surrounding it. The only question now is whether the SEC can find enough evidence to prove he committed a crime to prosecute. This can prove to be far more difficult than it sounds even though it is fairly obvious that this trade was triggered by confidential company information of both the pending bankruptcy filing as well as the knowledge that sapphire would not be a part of the new phones.

      Where this guy made his mistake is being greedy and riding out the value increase of his stock because of the iPhone rumors until the last minute. It is guaranteed that he knew months ago that the rumor was false as well as the company being on the cusp of Chapter 11. Had he sold this stock immediately when he knew of these things, it likely would have gone unnoticed by the SEC. Greed is biting this guy in the rear right now.