Sapphire manufacturer GT Advanced Technologies (GTAT) bankruptcy protection announcement sent shockwaves throughout Wall Street on October 6, 2014. Investors and financial institutes were shocked, no one expected the seemingly promising Apple sapphire supplier to declare insolvency.

"It's unbelievable ... I don't think anyone expected this," a Reuters report quoted Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas saying.

The company will remain operational after the bankruptcy filing, and will be seeking debtor-in-possession financing to get access to additional funds, GTAT stated in its press release. As of Sept. 29, 2014, the company had US $85 million of cash, but now must pay back Apple US$ 439 million and $434 million of convertible bonds, according to a Bloomberg report. The company’s debt totaled at least $873 million.

GTAT gained traction as noteworthy investment on the stock market after signing a $578 million multi-year sapphire supply agreement with Apple on November 4, 2013. The company’s stock value nearly doubled during the nine months after signing the deal with Apple. However, the company stocks took a downward turn in September when Apple slashed plans of incorporating sapphire cover glass on the iPhone 6 and iPhone 6 Plus. Goldman Sachs downgraded GTAT stocks from buy to neutral. Since GTAT’s bankruptcy announcement, company stocks have plummeted 92 percent to US $0.80, and is projected to be delisted from Nasdaq by some financial analysts.

The company that built up GTAT, has also become the same one to tear it down. Strained relations with Apple led to the sapphire manufacturers spiraling finances, according to a Forbes report. Although, the cause of the deteriorated relations remain unclear, analysts believe GTAT may have failed to meet contract obligations, or relations may have soured after Apple turned to other sapphire suppliers.

GTAT still owes Apple US $350 million for a loan it received to build a sapphire manufacturing facility in Arizona, according to a report from Raymond James. However, Apple is believed to have forced the company to repay loans much earlier, according to a report by Gilford Securities. The report noted a rapid decline in GTAT’s cash reserves during third quarter 2014 from $333 million to $85 million, as evidence of increased loan repayments.

Additionally, Apple’s withhold of $139 million payment was the last straw that broke GTAT, according to a Wall Street Journal report. The payment was the last of the four prepayments of Apple’s $578 million deal, which GTAT was expected to receive towards the end of October to meet certain operational targets at the plant in Mesa, Arizona, U.S.

GTAT’s bankruptcy will not affect Apple’s plans of using sapphire in Apple Watch in 2015, but “calls into question who will supply the sapphire for Apple watches,” said Molchanov.