Posts Tagged ‘Apple Prepayment’

The city is Mesa is set to delegate the operational rights of the Mesa sapphire plant sub zone to GTAT on Monday. Up to this point the city of a Mesa has acted as the grantee of the Mesa sapphire sub zone operations under approval that was granted in March 2014. According to the FTZ, the grantee (city of Mesa) has maintained the greatest direct control over the sapphire plant zone operations. The grantee also directly bears responsibility and Customs liability for the Zone’s operation.

GT as soon as Monday June 2nd may take direct control over the sapphire plant zone operations as well as direct responsibility for FTZ Customs liability. On May 20th GT posted a new job titled “Foreign Trade Zone administrator” to “Provide FTZ and import/export compliance training for all personnel working within the zone and at certain other locations”.

GT’s November SEC filing indicated that the company expected to receive the final prepayment in April. Stephen Chin of UBS, in his recent report published earlier this week indicated that the delayed receipt of the final Apple prepayment might be due to significantly more furnaces being installed at the Mesa facility versus his original estimates.

We believe one of the reasons that GT has not received its 4th prepayment from Apple yet (originally estimated the 4th and final would be paid by end of last month) is that there could be around 2,000 furnaces being installed (about 30% more than we originally estimated)

The transfer of the sub zone operations from the grantee (city of Mesa) to GT Advanced Technology on Monday June 2nd might be the final hurdle required before Apple releases the final prepayment of $138 million to GT Advanced. The final prepayment from Apple could be received as early as next week. The Mesa plant is expected to be completed in June.

Next week is setting up to be a very interesting week for GT Advanced Technologies.

Apple’s WWDC begins on Monday June 2nd.

GT is expected to be granted operator status over the Mesa sapphire operations sub zone on June 2nd.

GT’s annual stockholder meeting is scheduled on June 4th.

The final prepayment of $138 million from Apple could be received by GT as soon as next week.

Selecting an Operator (FTZ Website)

For businesses to use the Zone, save money, and expand or keep their operations in the community, the Zone must be fully operational.

Upon a grant of authority, the Grantee must address the processes of administration and operation of the Zone.

Some Foreign-Trade Zone Grantees elect to operate their General Purpose Zone themselves. In doing so, the Grantee maintains the greatest direct control over Zone operations, yet also directly bears responsibility and Customs liability for the Zone’s operation.

Disclosure: I am long GTAT


Reminder: My PTT Research Forensics Newsletter that is scheduled to be published on Thursday June 5th at 3pm EST.

My Forensics Newsletter pricing is now available and a special 20% launch discount (for the first 48 hours) will be available when my Forensics Newsletter subscription goes on sale on Monday June 2nd at 12pm EST.

If you were wondering what my next pick will be. Here is my sneak peek summary:

My next pick is a company that is built on top of a strong foundation of intellectual property. My analysis of the company’s data and public comments indicate that a “major ramp” in future sales is just getting underway. The company’s C-suite is in the process of scaling up the business and preparing to manage a much larger and more complex company. The company has quietly created an integrated eco-system comprised of software and hardware that continues to extend its competitive edge over its largest competitors. The industry that the company primarily supports is in the early stages of what is expected to be an explosive and long-term growth cycle.