GT Advanced supplier agreement reveals $50 million penalty for Apple product leaks

By Shawn Knight · 8 replies
Oct 13, 2014
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  1. Modern-day Apple has a reputation as one of the most secretive technology companies on the planet. The Cupertino-based company goes to great lengths to keep the competition guessing and now thanks to court filings from GT Advanced, we have an...

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  2. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +421

    Then why did they sign an agreement if it was "oppressive and burdensome".

    There has to be some missing components to this scenario, because what has been reported on various sites isn't really making a lot of sense. A month or so ago there were reports that GT Advanced was doing well on sapphire production, but over in China they were having difficulties with the yields cutting it into shape.
  3. JohnCB

    JohnCB TS Booster Posts: 118   +63

    It doesn't matter what you say after the fact, they signed it and agreed to it. If they thought it was so terrible, then they should never of signed it. The most common response here is that they'd of never gotten the business if they didn't agree to it. Doesn't matter, you made your bed, lay in it.

    No one forced you to sign anything, thus it wasn't under duress, therefore you owe Apple a ton of money. Sucks to be you.
  4. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,886   +1,222

    Who is 'you' exactly? someone working there? 50m is the entire worth of their company. thats' a bit steep.
  5. JohnCB

    JohnCB TS Booster Posts: 118   +63

    It may be a bit steep but they already agreed to it. You can't just agree to a contract, then when a clause works against you suddenly stand up and say "but that's not fair!"

    The time to negotiate and adjust was before signing the agreement. They signed it and they broke the contract. Therefore they have to pay whatever the agreed upon penalty is. It's pretty black and white.
  6. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +421

    No its not, its a substantial portion, but they are a $150M company afaik.

    Edit: I'm not well versed in corporate financials. However, from what I gather from these 2 documents: Overview_2014_August_final to post.pdf
    They certainly weren't in terrible financial shape before the agreement with Apple. So now, if they suddenly are, there may have been some serious mis-management of the funds.
    Last edited: Oct 13, 2014
  7. mctommy

    mctommy TS Addict Posts: 215   +38

    They got $500 million dollars in funding from Apple... probably mis-managed that and then some.
  8. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,886   +1,222

    When I wrote that, I just checked yahoo finance for their market cap, which after yesterday was $53.64 million dollars. that's just investors think their company is worth and it's just the easiest and fastest way to check a company's value. It's not what you could sell their assets for, or even buy the company for. Their stock price is $.39.

    I still think a 50m penalty is really harsh. I really doubt some employee cares if it's 5m or 50m, to them it's their job either way.
  9. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +421

    Well $50M doesn't sound harsh to me, Apple is incredibly secretive about their products, if information gets leaked early it could easily end up costing Apple well more than that in sales revenue if a competitor steals the idea/design.

    Also, comparing market cap after the total crash of their stock to a potential $50M fine that never happened is missing the point. This is just a new article to provide some insight into the NDAs Apple has their suppliers sign, it just happens to involve GTAT.
    Last edited: Oct 14, 2014

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