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GT Advanced: Partner with Apple, Files Bankruptcy

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GT AdvancedGT Advanced Technologies, a partner with Apple in an Arizona plant that makes sapphire glass, said it filed for bankruptcy protection voluntarily.

The shares of the company dropped over 90% to just 75 cents, which wiped out a market value of nearly $1.4 billion. The stock was trading at one time in the early part of July at $20.54.

GT Advanced suffered a huge setback in September when its sapphire glass, that is scratch-resistant, was not used on the new iPhones that are larger screens.

It appears, said one industry analyst that something that is very fundamental broke down in the Apple and GT relationship.

Sapphire glass is close to being completely scratch resistant and is almost unbreakable, making it an alternative to other glass for displays on smartphones.

Apple uses sapphire screen for two of three versions of the Apple Watch, which is not available until early 2015.

The company also uses the same material on its touch sensor button and camera cover on the iPhones.

It is a business that has had a solid association with Apple, and was a darling just a short time ago, so it has surprised the market and taken individual traders by surprise, said one Wall Street analyst.

Up through the close of business on Friday, GT Advanced stock was down 36% since September 9, when Apple unveiled the new iPhones

The company had expected a $139 million payment from Apple during October. Apple up to August 5 had made payments to GT Advanced of $439 million.

An exclusive license was granted by the company to Apple for certain applications of its technology of sapphire glass, but the maker of the iPad did not have any obligation to buy sapphire glass from GT Advanced.

GT said in its August regulatory filing that the costs it incurred in connection with the plant in Arizona significantly impacted its liquidity and financial results.

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