Let the short covering begin. After getting destroyed yesterday, shares of GT Advanced Technologies (NASDAQ: GTAT) are staging a recovery. Bottom feeding traders are laying the odds today, and the swing higher is on.
Does this mean the stock will recover to its previous highs? Don’t count on it. With its market cap being wiped out by yesterday’s Chapter 11 filing, lawyers are now getting involved. Shareholders lost quite a bit yesterday, with around 30 ETFs counting GTAT as part of their holdings. That doesn’t count the individual investors still holding.
It is hard to imagine that after the iPhone event, anyone still believed in the GTAT story. Sapphire Glass did not make it into the iPhone 6 lineup, and was only announced for the Apple Watch. An unproven product. The price announced for the Apple Watch was incredibly deceptive, with the starting price of $349. Expect the price tag to get over a grand in a hurry.
So, what happened to GTAT? Without the mountain of sapphire glass orders, they were left out in the cold by Apple. Granted, with the market cap collapsing from a billion plus to just over $170 million currently, Apple could buy the supplier on the cheap.
It seems inevitable that sapphire glass will make it into Apple’s iPhone line, but it may be too late for GTAT. Investors lose millions, and the Cramer curse continues to ring true.
GTAT will now have to deal with an investigation by Ryan & Maniskas LLP for potential securities law violations by certain officers in the company.
Today? Day traders are having a field day with the stock, that is up around 60% on the seven times the average three-month volume. It won’t assuage the pain of long-term shareholders, but money is being made in the stock that shocked Wall Street yesterday with the sudden Chapter 11 filing.