Professor Max
Steve Jobs, Issac Le Maire, and Professor Max?
How the legend of a six-month iPhone 1G cover screen glass ramp and short-selling turned a promising Made in the U.S.A. manufacturing facility into a "paltry" 10,000 sq ft per employee data center
@GriffHernandez
Published: February 19, 2015
Ye olde buzzed Professor...
I was lured up highway 290 this week to visit a techie friend in Austin who had knowledge of my unusual interest in the GT Advanced Technologies bankruptcy case. She wanted to introduce me to a man named Professor Max.
A man, she explained, with unusual theories on the Eurozone, the Fed, and the Asian economy which I did not dare get into knowing full well that I was in the heart of Alex Jones territory but more importantly, a very unusual theory on the GT case.
Of all the interesting and insanely incomprehensible Apple / GT Advanced Technologies rumors and theories that I've been exposed to this past year and a half perhaps the oddest and most ironic came up in a conversation I had last night with a self-proclaimed economics professor at a little bar just off of South Congress. Emphasis on bar and emphasis on "economics professor" for the record.
"Professor Max" he also asked me not to mention his last name when I finally told him that I would write about his theory called it the Isaac Le Maire Paradox.
Suitably named after the notorious 16th-century Dutch merchant who according to historians was the first investor to ever utilize hedging techniques by short-selling VOC in 1609.
However, according to Max and later verified by a simple Google search shorting the Dutch East India Company (VOC) was not what made Le Maire notorious.
What made Le Maire and his cohorts arguably considered to be the first hedge fund in history notorious were their efforts to drive the share price lower by spreading scandalous rumors about VOC.
Indeed, history's very first deliberate bear raid!
vorige.nrc.nl/international/..._invented_short_selling_in_1609
Apple new product rumors are routinely widespread and therefore fertile ground for the application of Max's theoretical tactic...
As explained by Professor Max, what helps "feed and stimulate the roots" of the "Issac Le Maire Paradox" tree are publicly traded businesses with highly secretive corporate cultures.
Naturally, the technology and pharmaceutical sectors came to mind but more specifically Apple.
Max explained, how the natural and competitive measures businesses take to safeguard new product developments, hype releases Tesla comes to mind, and the strict penalties associated with information leaks enforced on component suppliers via exclusivity agreements obviously Apple can often lead to an enormous amount of speculation by the investment community at-large.
There are even whole podcasts, websites, blogging communities, and Facebook groups dedicated to "sniffing-out" potential facts from vast seabeds of reasonably well-intentioned yet grossly inaccurate pump-fakes.
Therefore, according to the Professor and with a benefit of hindsight one can drive an "?Minivan" through the GT Advanced Technologies iPhone sapphire cover screen rumor was the quintessential perfect storm for the type of market gossip and speculation that would create trading opportunities in both GTAT and Corning.
To quote Professor Max: "It is what it is and was what it was. The pump and dump of pumps and dumps."
Unfortunately, after the amount of time and energy I've spent researching and analyzing the Apple / GT partnership, Professor Max's theoretical claim lends itself well to several facts as I understand them.
Additionally, as indicated by a simple short interest history search, GTAT now GTATQ and traded over-the-counter may have been the single-most shorted ticker symbol in NASDAQ and OTC history based on share float.
Interestingly enough, it was the highly secretive partnership between Apple and GTAT as well as the solid business relationship Apple has with Corning that provided for the ripest of Issac Le Maire Paradox environments.
How Max's theory works in the GT case...
Analysts, investors, and "media" would "innocently" pump the iPhone sapphire cover screen story in a self-serving effort at "driving-up" the GTAT share price based on rumors that could not be proven as false.
This would temporarily drive profits for long-position traders in GTAT and Apple as well as provide a shorting opportunity in Corning.
At or around the release date of the iPhone 6 and 6 Plus, GTAT long-positions and Corning shorts would be reversed, all the while maintaining a solid long position in Apple...and Wallah! The Issac Le Maire Paradox!
To make matters even more idealistic for this conspiratorial occurrence, fuel for the technologically savvy firestorm of equity arbitrage would even come from the legendary story of how Steve Jobs pushed Corning to supply Apple with huge volumes of Gorilla Glass for the very first iPhone in an incredibly short amount of time.
According to the Professor, this tech folk story set up an unrealistic production window given the obviously unique manufacturing processes involved in growing sapphire.
techland.time.com/2013/01/11/...h-the-cracked-phone-read-this/
In reality and as anyone with the slightest knowledge of crystal growth production knows there was virtually no plausible way for GTAT to adequately supply Apple with the amount of high quality cover screen sapphire needed to facilitate a 2014 iPhone 6 and 6 Plus release.
Simply put, the sapphire material was and possibly still is intended to be used for other Apple projects such as the ?Watch and sapphire laminates for iPad, etc.
Even more unrealistic were supposed attempts to produce this heavy volume of sapphire while the Mesa Facility was being renovated and retrofitted to house its newest tenants, GT and Apple. It just wasn't possible from a production standpoint.
In the time it took us to finish roughly four imperial pints of Broughton Dark Hunter, Professor Max laughed and pointed out that all of these strange "invisible market forces" turned a promisingly rare American manufacturing facility into a "paltry data center" his words.
Sound absurd? I have to admit the guy was interestingly thoughtful.
Tweet me @GriffHernandez and let me know your thoughts. Please include $GTATQ in your tweet.
Please Note: No cannabis plants were harmed during the conversation I had with Professor Max.