Apple Inc supplier GT Advanced Technologies Inc will hold its first Chapter 11 bankruptcy court hearing on Thursday at 10 a.m. ET, according to a clerk in the U.S. bankruptcy court in Manchester, New Hampshire.
Investors are eagerly anticipating the hearing, at which GT — Apple's partner in a sapphire glass plant in Arizona — has said it will explain the events that led to Monday's surprise bankruptcy filing and sparked a 90 percent drop in GT's stock.
On Tuesday, GT shares closed up 51 percent at $1.21, regaining a mere fraction of the $1.5 billion they lost on Monday. [ID:nL3N0S130Y]
"Looks like some investors are betting that bankruptcy will leave some value for equity," Raymond James analyst Pavel Molchanov said in an e-mail, referring to the rise in the company's shares on Tuesday.
"I think that's a very dangerous game to play," he said, citing the company's many liabilities, including its prepayment loan from Apple, convertible bonds and numerous trade creditors.
The bankruptcy filing stunned the market, which was bullish about the company's future. GT had earlier forecast that its revenue would more than double this year from 2013.
The company's stock had more than doubled in the nine months between November's announcement of the new Arizona plant and the launch of Apple's new large-screen iPhones on Sept. 9, with investors hoping that GT would replicate Corning Inc's success with Gorilla Glass.
Since then, the stock had fallen steadily after GT's sapphire glass was left out of the new iPhones. GT had said a month earlier that the Arizona plant would not be fully operational until early 2015.
"We believe the bankruptcy signals a failure by GT to meet its own objectives with Apple, which we believe will likely weigh on the company's ability to remain a sapphire equipment or material provider," Canaccord Genuity analysts said in a note.
Canaccord Genuity and Stifel Nicolaus suspended coverage of stock on Tuesday.