Look out below

Apple last November signed a deal to make a prepayment of about $578 million to GT Advanced to build furnaces used to make synthetic sapphire. When Apple introduced new iPhones last month though, the smartphones didn’t include the material.

The lack of sapphire in the new iPhones was a surprise to those who had tracked the partnership, and the development exposed that GT Advanced had become overly dependent on Apple, said Pierre Maccagno, an analyst with Dougherty & Co., who recommended investors sell GT Advanced’s stock after the iPhone announcement. While GT Advanced generated $299 million in revenue last year, its sales to Apple in 2015 could have been about $700 million, Maccagno said.

“When Apple announced the iPhone 6, that came as a big surprise that there was no sapphire,” Maccagno said in an interview today. “They are highly dependent on Apple.”

Apple Sapphire Supplier GT Advanced Files for Bankruptcy - Bloomberg

Shares of GTAT closed yesterday at $11.05. Today in after-hours trading they were hovering around $0.80, and that's after free falling post iPhone 6 event in where the word “sapphire” was conspicuously absent. Is there light at the end of tunnel for GTAT? Yes a small pinpoint of light, assuming the stock stays listed, they remain an Apple supplier, the Apple Watch is a huge hit, and that the “s” in iPhone 6s really does stand for sapphire. (In other words, not looking so good.)