Samuel Sanmina: Last Remarks on Syntax-Brillian

by: SA Editors July 08, 2008 | about stocks: BRLC    
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Samuel Sanmina submitted the following to our editorial staff:

Surprisingly (or maybe not so surprisingly for others), a little more then two months after analyst Tristan Gerra of Robert W. Baird stated that chances of bankruptcy for Syntax-Brillian (BRLC) “are very low” and that company will be able to refinance its debt, lowering its interest expense “significantly”, the company files for Chapter 11.

I wanted to say this back then, but for slander and libel reasons, I chose not to. In my personal and humble opinion, it was nothing more than to help pump the stock price back to $1.50 so some of the institutional holders could exit at a smaller loss before this current event occurred.

The company entered an agreement to sell its Olevia LCD division to TCV Group, one of Syntax-Brillian's original partners, which provided the plastic injection molded parts for the Olevia televisions under a newly created company called Olevia International Group. As some may recall, Syntax-Brillian originally wanted to change their company name to Olevia International Group, but even with shareholder approval, they later decided not to for some reason. Now it appears that we know the answer why.

I had actually said a couple of months ago, partly serious and partly joking, to some of my colleagues that the company was probably planning to use the new name after exiting Chapter 11. It appears that I was partially correct. Instead of using the name after Chapter 11, they are allowing the company acquiring their Olevia division to use it while the company is in Chapter 11.

The terms of the agreement is that TCV Group / Olevia International Group will receive most of the assets and property of the Oleiva LCD division owned by Syntax-Brillian in exchange for assuming $60 million in debt. This means that Syntax-Brillian transfers all the assets of their Olevia division to TCV along with $60 million in debt, and BRLC receives no cash from the sale.

This is also, in my humble opinion, however I personally will not be surprised if some of the original founders of BRLC such as James Li, Chow Man Kit, eventually have a position in and even acquire ownership in this new Olevia International Group company in the not too distant or near future.

Speaking of James Li, he and the rest of the board members, including Vincent F. Sollitto, Jr, , Bruce Berkoff, David Chavoustie, Yasushi Chikagami, and Max Fang, all resigned as directors effective June 30, 2008. This left Michael Garnreiter as the sole board member, who then terminated James Li’s role as President and Chief Executive Officer. I’m guessing that’s the reason he didn’t resign, seeing that you do need at least one board member in a corporation.

In addition, the company is also announcing the intention to sell off Vivitar. The sale is occuring separately from Syntax-Brillian's Chapter 11. Vivitar is not part of the Chapter 11 filing.

Furthermore, the company received a delisting notice from Nasdaq for falling under a $1 trading price for over 30 days. The company stated they will not attempt to regain compliance and will let their common stock become delisted since they expect their common stock to become worthless because of the reorganization and subsequent transaction.

Although my legal knowledge isn’t too great, this move seems to actually be fairly well executed from a legal standpoint. After the reorganization, there will be nothing left but a shell company with no assets. Therefore, with the current lawsuits form their former partner TECO, former shareholders alleging fraud will have nothing to go after from the company. However, the lawsuits are probably just one of many reasons for this move by the company.

It certainly has been an interesting year and 2 months since I started writing about Syntax-Brillian on Seeking Alpha. Many fascinating events have occurred with the company since then, most of them very negative. This last event seems to be the final nail in the coffin. I personally hope that some of those people who read my articles sold out, or at least avoided buying BRLC altogether, and avoided this last tragedy with the company.

I am not sure whether Seeking Alpha will publish this article but I certainly hope so since this is most likely will be the last on the company seeing how it will not be around much longer. Hopefully this event will provide some closure to some shareholders that are still holding.

Disclosure: I would not say I am long the stock but I did buy 1 share of BRLC and requested the stock certificate. I am having it framed to put on a wall. It is to serve as a commemoration and memento of the company since the stock most likely will not be around in a few months. Other then that, I have no position in the stock.

 

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This article has 12 comments:

  •  
    Jul 08 11:57 AM
    This is a sad day for all I truly believe our laws suck and no company once under chapter 11 should ever be allowed to use the brand name ever again. After losing the majority of my life savings I would be content with a parting gift of at least one of their tv's no such luck Alot of people are going to be bitter I know I am. I know you've been warning us for some time and been catching alot of flack for your insight not that it matters any more But you've been right on the whole way through samuel.
    Reply | Link to Comment
  •  
    Jul 08 12:43 PM
    You were right, and most of us responding to these articles bullishly over the last year were wrong. What we took as an attempt by management to actually save the company appears to have been a setup to just transfer the assets to another company (probably with Li at the helm). Book value doesn't mean squat when the board dumps all the assets to a shell company and sticks it to the stockholders. Maybe the court will see that and refuse it, but I'm not holding my breath. Currently, the stock is worth less than the commission I'd have to pay to sell it, so I'll just keep it. But however bullish I was on BRLC and a possible turnaround, in regards to crazz's comment, if you had your life savings in BRLC stock --- man, you were crazy. I wouldn't put all my life savings in ANY one stock. McDonald's, Exxon Mobil, GE, whatever.
    Reply | Link to Comment
  •  
    Jul 08 03:05 PM
    Hey CT yea I was crazy and stubborn and got burned averaged down and after a whirlwind of efforts to stay on top of the problem we were given this the signs were there and I broke all rules of trading and learned the most important lesson in life that even the cramer haters would agree with once the man in charge of the money goes so can the company. Buffet would dump all in one basket unfortunately he wouldn't of touched this stock with a 10 foot pole. Good luck to all in future stock decsions I won't be making to many for sometime.
    Reply | Link to Comment
  •  
    Jul 08 03:30 PM
    U r just a scumbag shorter who got it FABULOUSLY right. Anyone who can spend countless hours 24/7 on a yahoo message board
    has a screw loose ooooor (as you have disclosed all along) a short position in the stock.

    So pleeeease stop with the "...I personally hope that some of those people who read my articles sold out, or at least avoided buying BRLC altogether...:" BS!

    It was to YOUR financial advantage(or who ever you work for) to trash this stock. Congratulations! home run...
    Reply | Link to Comment
  •  
    Jul 08 03:34 PM
    Samuel,
    Your timing is impeccable. The Seeking Alpha team states you submitted this YESTERDAY, seemingly before the 3AM July8th release.

    How is it you came upon this information before the public? Just what firm are you associated with?
    Reply | Link to Comment
  •  
    Jul 08 06:16 PM
    Newswire:
    Syntax-Brillian Announces Asset Purchase Agreement, Files Voluntary Petition for Chapter 11 Reorganization to Facilitate Sale
    >>> Tuesday July 8, 2:45 am ET <<<

    Ok, let me get this straight... You were up near midnight scanning the wires and at 11:45 PM PST caught the BRLC Press Release. Then, within 14 minutes you were able to read, digest, compose, type, edit and email your 12 paragraph article to get it in before midnight PST???

    Bullcrap!!! That is IMPOSSIBLE!!! You will have some explaining to do to the SEC! This is evidence of insider information!!!

    Reply | Link to Comment
  •  
    Jul 08 08:49 PM
    Hey Sammy, are you a one stock horse or do you have opinions on other companies? good or bad. I just want to know if you got lucky with BRLC or if you can consistently pick winners (or losers!). I searched for other articles by you on other co's but couldn't find any.
    Reply | Link to Comment
  •  
    Jul 08 10:17 PM
    Dudley, if I just wanted to make money off of BRLC I could of just shorted, bought puts, and keep quiet and waited for today. I wouldn't have to say a word. I been walking on Seeking Alpha on BRLC for the past year to warn some folks and notify others of a great shorting oppurtunity. I thought a lot of folks would fall for the bullish analysts, bullish management, and misleading financial statements.


    RC/Sandy and your buddy, do you really think I have access to insider information? If I did I would not be saying anything publicly about the company especially on the internet. I would of kept very quiet about the stock like all the fellows who have access to insider info does on Wall Street.

    After looking at my word file where I typed the right draft, I last saved the file at 1:30 pacific time. So I actually submitted the file today around that time. You can ask Seekign Alpha if you don't beleive me.

    badarse, sure I have plenty of opinions and positions on many other stocks. However they are honest to good companies running legit businesses. So they do not have the theatrics as BRLC does and are quite boring to write about in comparasion.

    BRLC was a special cause and fell within my specialty,consumer electronics. That is how a forsaw a lot of problems.

    My track record at predicting companies and products within the consumer electronics industry is very good. Aside from BRLC's demise, I also predicted that Vizio would do extremely well ahead of time which they did. I also told some friends ahead of time that for this generation of video game consoles, the Nintendo Wii would do fairly well. They laughed at the notion and said Nintendo was coming in dead last like many on Wall Street a few years back. It turned out Nintendo did much more then just fairly well.

    I actually have another short pick I am currently researching which is also within the consumer electronics industry. Now I don't think the stock has the problems BRLC does but is just highly overvalued. So it isn't a 90%-100% short but more alone the lines of 40%-50%.
    Reply | Link to Comment
  •  
    Jul 08 11:51 PM
    All those deals(leading us on) they made will still be in tact for the glass when the start up begins... who from the old oripmeoff team will be on the new Olevia internatinal LLC ?
    Reply | Link to Comment
  •  
    Jul 09 10:19 AM
    RC/Sandy and your buddy, do you really think I have access to insider information? If I did I would not be saying anything publicly about the company especially on the internet. I would of kept very quiet about the stock like all the fellows who have access to insider info does on Wall Street.
    ======================...
    Samuel,
    Curious stuff. Thousands of articles published on this sight, none have an introductory staff comment except yours however I noticed its been altered today the 9th of July to remove the word YESTERDAY. Fortunately I saved the original page and submitted it to the SEC.

    Any idea why the word yesterday would suddenly disappear from the staff comment?
    Reply | Link to Comment
  •  
    Jul 09 10:27 AM
    Stock supposeldy worthless yet up 40% this morning? WTF is up with that?


    July 8, 2008, 11:21 am
    Syntax-Brillian Files Chapter 11; Shares Now Worthless
    Posted by Eric Savitz
    The television maker Syntax-Brillian (BRLC) this morning announced that the company has filed for protection from creditors under Chapter 11 of the federal bankruptcy code, and that its stock “will have no value” under a proposed reorganization plan.

    Reply | Link to Comment
  •  
    Jul 09 12:10 PM
    Yes, I too copied the original page that said it was submitted "yesterday" - meaning 7/7/08 - when the article was originally posted the morning of 7/8/08, and submitted it to the SEC. Samuel was also posting on the Yahoo Finance BRLC message board about Seeking Alpha publishing his article the morning of 7/8/08. When I challenged him about how he submitted it YESTERDAY, he defended himself by saying, quote:

    "The press release came out today if you use Eastern time. However on the west coast it actually came out yesterday."

    messages.finance.yahoo...

    Yes, "technically"... that is true - it came out at 11:45 PM PST. But once again, it would be IMPOSSIBLE to read, digest, compose, type, edit spelling and punctuation, then email the article before midnight PST!

    So, Sammy and Seeking Alpha will have to answer some questions about this to the SEC.
    Reply | Link to Comment
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