GT Advanced Technologies Inc fka GTAT

[MattySR]

Meh. I just did some interesting comparisons of the 4 balance sheets.

Try 2 keep up :p, scroll all the way down for my conclusion if you can't.

So in December they moved the furnaces into inventories, from prop / plant and equipment. But in December we see 225 mil or so of Stockholders Equity vanish, compared to November. This can be explained by GTAT demoting the furnaces FAIR value per furnace by 100k IMO, ill explain below.

(I forgot the exact amount of furnaces there are, ill do the math with 2030 furnaces. close enough)

In the first 2 months, they valued furnace fair value at about 270k each and put that into PROPERTY/PLANT/EQUIPMENT. 270k X 2030 furnaces =

548 mil.

So 548 mil in that category was for furnaces. This is evident because once they moved furnaces into INVENTORIES in December onwards, prop / plant and equipment dropped to 58 mil for both months.

So 548 mil should have moved into inventories, right? Because both months of October and November, furnaces were valued at about 548 mil. Well in fact only about 330 mil went into inventories for the month of December, and stayed generally the same for the month of January. All other things stayed generally constant. (+ or - 10 mil in cash etc etc..)

330 mil / 2030 furnaces = 162K. In december, GTAT reduced the value of its furnaces by about 100k to 162k (Fair Value), which equates to about 200 mil in reduced assets. WHICH IS WHY WE SEE STOCKHOLDERS EQUITY DROP 200 MIL FOR DECEMBER, AND STAYING CONSTANT IN JANUARY.

Obviously inventory does not sell for fair value. And since our debt to Apple is SECURED by the furnaces, for our(Shareholders) purposes, lets just take out the fair value of 330 mil in furnaces off the balance sheet, and the 439 mil Apple debt off the balance sheet. (I know the debt could be less if its payed back faster, but lets just assume it does not get payed back faster)

That leaves GTAT with about Assets equaling 514 mil, and Liabilities equaling 660 mil. So for GTAT to hit Stockholders equity of 0 plus 1 (safety net for shareholders) then they have to sell furnaces at least 146 mil more then the debt owed 2 Apple. Which would be 585 mil in Furnace revenue.

585 mil / 2030 = 288k.

Obviously this won't happen all at once, but the GREAT thing about that settlement we signed in December is that we get 2 keep a large portion of the revenue of the furnaces sold. Usually SECURED Debt is payed back instantly with the sale of the property/inventory/equipment, etc. A lot of people selling GTAT stock are forgetting this crucial element IMO. Even I just realized how valuable that settlement is to us.

(DISCLAIMER - THIS IS ALL FURNACE SALES ONLY, NOT INCLUDING ASSET INCREASES FROM OTHER VENUES OF GTAT'S BUSINESS)

So yeah, GTAT would be golden if they could sell these furnaces for 288k or more, or even less if other business sectors start compensating, like the announcement on the 19th. IMO. I think all the math here is solid.

Also, going against what i have said in the past, IMO the market value of the balance sheet would show that Assets are in fact greater then Liabilities since January 31 :) As of January 31 shareholders are safe..