GT Advanced Technologies Inc (NASDAQ:GTAT) announced this morning that it and its subsidiaries have filed for chapter 11 bankruptcy, sending ripples through Wall Street. Analysts from multiple firms warned investors about the company as early as last month when Apple Inc. (NASDAQ:AAPL) unveiled the iPhone 6 and 6 Plus.

Neither phone has a sapphire glass screen, which of course was a major blow to GTAT. In light of this morning’s news, the situation appears to be even worse than analysts initially feared.

GT Advanced technologies

GT Advanced Technologies delays business update

GT Advanced Technologies Inc (NASDAQ:GTAT) was expected to provide its most recent business update last week, but the company delayed the release until this morning. Apparently management wanted to sit on the bad news just a little longer until the company could initiate the bankruptcy filing.

UBS analyst Stephen Chin weighed in on the company’s business update delay in a report dated Sept. 29, 2014. His checks indicated then that GT’s August sales to Apple remained low at just about $4 million. Volumes were only for about 2 million two-inch equivalents, which were ordered for the Apple Watch.

Chin had a Neutral rating and $13 per share price target at that time, although it’s expected that Chin and other analysts who are covering GTAT will update their theses and price targets in light of today’s news.

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Wall Street is shocked

Today’s bankruptcy filing is especially a surprise because of the sapphire glass manufacturer’s multi-year agreement with Apple. The two companies signed the agreement for GT to supply sapphire glass in November, and Apple prepaid $578 million. Of course that agreement sparked speculations that Apple could use sapphire glass for the display for the iPhone 6. GT Advanced will have to pay that payment back to Apple starting next year over the next five years.

Even Jim Cramer thought GT Advanced Technologies Inc (NASDAQ:GTAT) was a home run as recently as August 26 when he said, “Talk about growth, they have the sapphire product that is going to go in the iPhone 6 launch… this is the stock I have been recommending” (hat tip to ZeroHedge for the find).

Unsurprisingly, institutional investors piled into GT Advanced Technologies in droves. Big names like Blackrock, Vanguard, Bank of New York Mellon and Susquehanna all snapped up some shares, according to Zero Hedge.

iPhone 6 sends GTAT downward

Goldman Sachs analysts Brian Lee, Thomas Daniels and Hank Elder removed GT Advanced Technologies Inc (NASDAQ:GTAT) from their Buy list last month after the unveiling of the iPhone 6 and 6 Plus. They downgraded the sapphire glass manufacturer to Neutral and cut their price target from $20 to $14 per share in their report dated Sept. 10, 2014. They cited the lack of sapphire glass in Apple’s iPhone 6. They also saw risk to GT Advanced Technologies’ 2014 guidance.

In another report dated Sept. 23, 2014, Raymond James analyst Pavel Molchanov cut his estimates for GT, also citing Apple’s decision not to use sapphire glass in the iPhone 6. The analyst maintained his Underperform rating on the company’s stock, saying at that time that it still looked expensive “even after its 34% shellacking since Apple’s product launch.”

In their report dated Sept. 9, 2014, Canaccord Genuity analysts Jonathan Dorshelmer and Josh Barlbeau also cut their price target on GT Advanced Technologies Inc (NASDAQ:GTAT) from $16 to $13 per share, also citing the lack of sapphire glass in the iPhone 6. Like the Goldman Sachs team, they also said then that it didn’t look like GT would be able to meet its guidance of between $600 million and $700 million.