Samuel

Samuel Sanmina: Last Remarks on Syntax-Brillian

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%.

Syntax-Brillian Can't Compete With Vizio

Sandy, when will you ever learn? Its never was really about the products that seperates Vizio and Olevia. It has been the company's strategy, plan, and execution. That is why Vizio has been in the top three best selling LCD brands in North America for the last few quarters while BRLC is struggling to survive.

The old adage you get what you pay for holds true. The quality of the lower end Vizios, Olevias, Westinghouses are all pretty much the same. It is more or less a commidity market. As I said before, I personally wouldn't buy most of the models from the lower end brands but they are decent for the price. It fits the needs for the more budget cautious individuals who only want a TV that works and not the best out there.

However, with the upcoming price competition, these lower end brands price attractiveness might start decreasing.

Syntax-Brillian Can't Compete With Vizio

mks4fun, you said, "Now, maybe an opinion as to why the most recent short interest has increased? After all, it's a buck stock! How much more blood can they squeeze out of this thing? Isn't there a point of diminishing returns?"

As you know, the numbers released is the total short interest. It does not show the amount of former shorts covering and new short positions being taken. Obiviously there are some shorts taking profits given how much the stock has fallen. I personally have booked a large amount of gains too and my short position is much smaller compared to its peak. Although, a lot of it was from $2.50 puts I bought almost a year ago.

Also, the analog to digital conversion might be somewhat overhyped. First of all, it only affects those that solely watch broadcast television. That means those with cable, dish, or direct TV don't even have to worry about it. In addition, many could just utilize the $40 coupon from the government and buy a converter instead. A report released a few months ago suggested that the growth rate in terms of percentage for HDTVs may have peaked already.

Warren Buffon: You said, "Although the share price has gone down substantially it has not been because of the reasons given in his previous articles so that the fall in price is fortuitous and does not give credence to his opinions."

I have been criticizing the company's cash flow problem, receivable problem with China and there unrealistic guidance which played a large part in the fall of the company's stock and their troubles.

If you refer to an article back in July, 2007; seekingalpha.com/artic...

I wrote, "A concern in the near term is whether or not the company has enough capital to produce enough televisions to meet their updated guidance for the rest of the calendar year. Even though the company was able to collect their overdue receivables from China, it is apparent the 120 day payment term restricts the cash flow for the company. The company was highly dependent on collecting their account receivables in order to produce more televisions and was forced to conduct their secondary in May as a result. The 120 day terms might cause problems for Syntax-Brillian cash flow again and the company might have to obtain further financing. "

Obviously, the company did not have enough capital to meet guidance as they had to slash back down just a few months later. The reason the short interest went up after the company raised their guidance is because many were betting they can't meet them which turned out to be right.


And the receivables in China did end up hurting the company again. First it caused them to obtain the 13% interest rate loan from Silver Point n November which was a new source of financing I have predicted. Then it caused them to default on the same loan. I said that the company was highly dependant on those China receivables which might lead to problems and they did.

Lucky?, the products have never been the company's problem. I personally may not buy most of their models but they do fit the need for many budget cautious consumers. However, the question is how long can they keep up the price difference between them and the name brands when prices for consumer electronics decline at a fairly rapid rate. And do you think they can stay viable when more companies in China like Chang Hong start selling directly in the US? It may end up like the DVD players market.

Obiviously if you are one of those buying BRLC at $1 or less for a speculative gamble as a small percentage of your portfolio or for a short term trade then there's nothing wrong with that.

However it is those who invested a majority of there portfolio into BRLC thinking it is a buy, hold, and retire stock or those that bought at much much higher prices, at $5+, and continue to average down with more and more shares as it falls lower and lower that should take a closer look at things.

Syntax-Brillian Can't Compete With Vizio

mks4fun, I have been criticizing the bullish analyts with overhyped, non-realistic, price targets ever since last May. In my very first piece on Syntax-Brillian; seekingalpha.com/artic... I have been criticizing the analysts who had banking relations with the company;

"On top of the disappointing earnings, the company also decided to announce an underwritten public offering for $150 million worth of shares. It also happens that many of the co-managers of the offering - Robert W. Baird & Co., Canaccord Adams, and Brean Murray - currently have analysts rating Syntax-Brillian as a strong buy, with target prices over $15. Could this be simply a coincidence?"

Most of those bullish analysts have now given up on the company and ended their coverage on the company like I mentioned in my last article.

I have been merely presenting a source of information in all my articles regarding events with the company, their competitors and the industry as a whole. People can judge the information I presented and the many other information availible to the company and make a decision for themselves on the stock. But as I said before, anyone that have read my article and made a decision to sell, not buy, or short the company's stock would of been better off then those listening to the bullish analysts.

Yes I have been shorting the company's stock and that is because I initially saw a company that had a good oppurtunity for a few years but a highly flawed business model that doesn't appear will work. To me, cash flow is king and positve earnings without adequate cash flow is meaningless. In the long run I have also mentioned I do see this company along with the many tier 2 and tier 3 brands losing out to the name brands and the industry consolidating. Recent reports from iSuppli and DisplaySearch already show that. And when more China manufacturers start directly selling in US, things will get tougher for all the competitors. Just take a look at what happended with DVD players.

Also, you make it sound like BRLC is the only stock that ever became overvalued. Stocks become overvalued all the time. Remember the mid to late 1990's. All the now no longer with us dot coms? How about recently with companies like CROX, HANS, HLYS?

Yes a lot of retail investors lose money by buying overvalued stocks but just as many or more retail investors also make a lot of money by buying stocks and selling them at highly overvalued prices.

I personally know people that have made quiet a bit buying and selling Enron and others that have bought and sold the many sub prime lenders before their collapse for a nice profit.

I along with many others realized that BRLC had become highly overvalued based on the rosy picture painted by management which we didn't beleive and took advantage of it. That is just how the stock market works.

Will Syntax-Brillian Survive?

I am merely presenting my side of the arguement of why I have been bearish on the company. It is just like the other authors here who are bullish on the stock and have been telling others to buy from $8 to $1 have done in the past. Obviously they saw a company with a good business business model and bright future while I saw a company with a flawed model and dim outlook.

People can read the information availible to them and make a judgement to whether or not Syntax-Brillian is a good company.

People that know my history know that I have merit in criticizing this company. This includes the dilutive secondary, criticism of their management, focusing on China instead of North America, competition from Vizio, price pressure from the name brands, the management quasi shaffle,the $250 million loan, and not to trust the analysts with $15 price targets on BRLC who also have investment banking relations with them.

This stock is a perfect example of a classic value trap for retail investors. Some people see they are in the LCD industry, have a decent product, believe the managements claims, the analysts' expectations and think the stock price will greatly appreciate in the future. I have been warning individuals to stay away from the company and notifying others of a good shorting oppurtunity since last May when the price was around $6. Anyone that have read the information I presented in the past and decided to either sell, not buy, or short the stock would have been better off financially. Anyone that listened to the bullish analysts who all had buy and strong buy targets at one time would of been worse off.

I seen many problems with the company when I first started shorting it and as time went by, new availible data and information I gathered through research caused me to become even more bearish. This includes either the management's ineptitude or their disregard for shareholder's wealth. Hence, I have continued to short the stock. It is no different then when investors are bullish on a stock and continue to accumulate more and more shares.

I can understand why some individuals refuse to believe anything negative written about a company. Retail investors often make the mistake of falling in love with a stock and cannot see nothing bad about a company while they would believe anything postive said about the company.

Will Syntax-Brillian Survive?

Richie, I am not shorting at these "current" levels. I have been shorting, covering and reshorting BRLC since the $6-$7 range last May. I still have some shares left that I haven't covered and therefore I have disclosed I am still short in the article. I am not worried since my last short was around the $2.50 range and even if the stock triples from the current price, I would still in the green.

I am simply summarizing the events and terms of the agreement as from what I read in other blogs, some retail investors do not simply comprehend what was disclosed in the 8-K and how bad it is. I do not know if it is the legalese or simply some people are too "in love" with a stock and can see nothing bad about the company.

Will Syntax-Brillian Survive?

Carson: The firm I work for actively trade hundreds of stocks in both the US and Asian markets. My employer has a short position in BRLC as of last week. As for Amtran when I disclosed my firm had a position, it was a short term long position which was closed out later. Amtran and also Kolin and TECO are some of the many stocks my firm actively trades in the Taiwan market and I perform some regular analysis on. Depeding on which day you ask, my firm may or may not have a position in the stock.

My employer could care less about what I do in my spare time away from work which includes blogging as long as I do not disclose publicly research from reports we purchased or information from our research not availible to the public yet.

beyondtheverge: The orginal line of credit was for $250 million: phx.corporate-ir.net/p...=

RC Martin: I do not know Andrew Left or any individual from stock lemon. In some cases he is off about the shady pratices of some companies but in other cases he is dead on.

Some inviduals believe I shorted BRLC one time and have not covered any shares since. That is not the case. I disclose I have been covering and reshorting BRLC many times already since last May. My current short position is much smaller then it has been in the past. I personally start taking some profits when I am up over 50% on a short position.

I did not say that Chapter 11 is imminent for the company. I am just saying the conditions just don't look too optimistic. Again, I am not recommending anyone to sell, short or buy the stock. I am merely presenting a source of information. Individuals are smart enogh to judge what I present and what others are presenting on the company and make a choice for themselves.

Although, an individual that have read one of my articles in the past and made a choice to either sell, not buy, or short would have been better off financially.

I have been critical of many problems with the company in the past. This includes their secondary, selling in China instead of focusing in North America, the overbullish analysts who have investment banking relations with the company, their $250 line of credit with Silver Point, competition from Vizio, and the price difference compression between name and value brands. A lot of the issues I raised ended up being as I anticipated and in some cases worse.

Syntax-Brillian Losing North American Market Share

I have nothing against their products. I personally would not buy most of them except the 7 serieis but they fit the need for budget minded consumers. I have my doubts about the Vizios, Olevias, Westinghouses, and Polaroids all staying viable as prices drop further and further and the difference between the name brands and value brands compresses. I pesonally do not believe tier-twos and tier-threes can stay as competive with the tier-ones in the long run. As for moving up, it would take some drastic marketing to become an established tier-one brand in the consumer electronics industry today.

The main problem now is thier business model and the execution of their management. At times it seems that the company is definitely not making decisions in the best interest for the majority of the shareholders. Instead of building trust and confidence on Wall Street, they destroying what little credit they have left.

The current problem with their creditors could have been avoided. It is somewhat astonishing for the company to obtain more and more financing and yet appear to be worse and worse.

I cannot say the current conditions weren't entirely expected. I have been crtical of the Silver Point loan back in November: seekingalpha.com/artic...

Although the outcome was more serious then orginally anticapated.

International Competition Between Syntax-Brillian and Vizio Heating Up

Yes of course all the other LCD makers is a threat to BRLC and each other. However, as I said in the past, Vizio is simply the biggest threat to BRLC right now:

"Syntax-Brillian’s biggest competitor in the near term is Vizio which targets the same consumers, those that prefer spending less on a LCD flat-panel television then what the name brand charges but still getting a good quality product. In the long term, when prices of established Tier-1 brand televisions such as Sony (SNE), Sharp (SCHAY) and Samsung come down it will prove to be a challenge to lower end Tier-2 brands like Olevia and Vizio, but in the near term Olevia and Vizio are each other’s biggest competitors. "

Vizio is the biggest threat simply because they are the largest lower end tier two and tier three tv maker. They have much higher production levels, more distribution channels and higher brand equity then the Westinghouse, Polaroid, Akai, Maxent etc.

They have the greatest capability to steal away at Olevia's potential marketshare in the short term.

Currently the more expensive higher brands such as Sony, Samsung and Sharp targets a different market where consumers have a larger emphasis on quality relative to price. When the prices of those Tier one brands does fall low enough sometime in the future, I am also certain that Vizio, Olevia, and the other lower end brands will lose market share to the big boys. The only exception is they are able to greatly increase brand equity in a short amount of time.

As for the Funai lawsuit, I have looked briefly into it. Although my legal knowledge isn't too great it appears the suit has very little merit to most of the companies involved. I do not think it will affect Olevia & Kolin nor will it affect Vizio & Amtran.

International Competition Between Syntax-Brillian and Vizio Heating Up

Sandy, whether you want to admit it or not, Vizio is a main competitor to BRLC. They both have the same target market of consumers that wish to spend less for a flat panel televisions then what the major tier one brands charge. Vizio growth comes at a threat to BRLC.

I'll try to put it in very simple terms. A consumer normally only purchases one or two flat panel televisions. If they purchased a Vizio, they are no longer going to buy an Olevia. As the Vizio brand becomes more and more popular more consumers will buy Vizio which means less potential customers for BRLC and their Olevia tvs.

I am not bearish on BRLC simply because of Vizio. Vizio is just one factor and I could probably spend hours listing just the factors that are publicly availible.

A lot of longs believe that the stock price is what they perceive as undervalued currently due to the high short interest. However, a lot of longs aren't seeing why the short interst is so high to begin with. Obviously the other larger hedge funds that are shorted the stock saw problems in the future that would greatly reduce the value of the stock like I did.

fool: I fully disclose that I am short BRLC. I personally have been short since $6-$7. The firm I work for has been shorting the stock also and at higher prices.

I personally have not covered yet since our research shows there still might be some undisclosed problems and potential threats to the company. The company has completely destroyed what little trust they had with Wall Street & Shareholders. Any other negative announcement will have a devastating impact.

I am not advising you or anyone to sell, buy, or short. I will advise you to invest with caution in a stock like BRLC.

International Competition Between Syntax-Brillian and Vizio Heating Up

Actually Sandy you can invest in Vizio indirectly by purchasing Amtran which trades on the Taiwain stock exchange under 2489. Amtran owns around a quarter of Vizio and also makes all their televisions. Our firm currently has owns a long position of Amtran and I suggest you and other investors take a look as well?

Also Sandy, wouldn't it be wise to look at competitors and the landscape of the market it operates in if you are investing in a company?

Can Syntax-Brillian Compete With Vizio?

What? You actually think articles posted here will actually move a stock? Please, the people that would actually be swayed by stuff here probably don't own enough shares combined to move the stock more then 1%.

Can Syntax-Brillian Compete With Vizio?

Are you talking to yourself? First we have this Samuel Sanmina and now we have Sandy Sanmina who is the biggest basher of BRLC on yahoo message boards.

Did you not post this garbage about a month ago?

<blockquote> Of particular interest is the $134MM of Asian sales which occurred during the Sept-Dec qtr and apparently remain largely uncollected. Has anyone ever received an explanation why sales in Asia of $134MM occurred at the same time a similar amount of "PAYABLES" were being booked? Isn't the cost lower than the sale by at least the level of profit margin?

Did Kolin manufacture and ship those Asian sales on behalf of Brillian or did Brillian book those sales on behalf of Kolin? It so hard to untangle the web of players. Where did the Olevia trademark originate? Wasn't that Kolin's brand when they did the deal with Syntax prior to the Syntax Brillian merger?

So much grey area...........but one thing is clear, expecting a FCC pass because you're a new start up is sophomoric mgmt at best. There is no justifiable excuse for costing shareholders $3MM. This outfit seemingly lacks competent mgmt and has a great future behind them. At least that is how this writer sees it. </blockquote>

<blockquote>For the record I am neither a buyer or seller of Syntax-Brillian. I am an interested observer concerned with the irrational exuberance being flaunted on Yahoo and also the baseless BS being bantered by so called "PROFESSIONAL ANALYSTS" with claims like "Greatest Short Squeeze of all time" and price targets with no foundation in reality. Why would a stock supposedly worth $15+ be trading at $4.60 if not for well orchestrated con games.

If readers are upset I would suggest you sue the financial firms that employ those so called analysts or write them demanding they retract the hype and fluff and terminate the BS.

In closing , I will say I have personally researched this outfit and wouldn't buy shares in the firm with your money, but apparently there are more than a couple PROFESSIONAL outfits that would like you to buy into their BS and take some shares.
Hint, when a stock is trading t $7+ and a secondary is declared complete at $5.75 and you the member of the public had no opportunity to participate its usually a signal that you're about to be fleeced by Wall Street Pros,(read, con men).

The aforementioned is the opinion of this writer and should not be taken as advice to buy or sell securities.
<blockquote>

Syntax-Brillian: The Signal is Still Scrambled

I agree with you and your analysis that Syntax-Brillian is one of the largest stock scams in history next to Enron.

Oh Sandy, quit pretending you have no position. You are obiviously shorting BRLC and/or own puts or else you wouldn't be bashing BRLC everyday on yahoo message boards, on here, and probably many other places. However, I won't disagree with your short position. It is indeed a wise move. BRLC will be below 3.50 in the short term and under 50 cents trading otc within a two years.

Syntax Brillian: The Future Looks Bleak

I am glad that so many people are interested in my commentry.

However, first of all I have no idea who this Sandy Sanmina is and no idea who the person quoted as samuel_sanmina posted by CA is either but it is not me. I do not waste my time on frivilous matters such stock message boards.

I fully diclose that I am short or rather the fund I work for is shorting this stock. It appears the market fully agrees with the threat posed by Sony's budget line of LCD Televisions which is one of the reason for the 15% decline today.

We were aware eventually a Tier -1 manfacturer would start producing lower costing televisions to increase their market share when we initiated our short position and if that didn't materialize, a price war in the television market would eventually drastically reduce the price difference between Tier 1 and Tier 2 &amp; 3 televisions. As a result it would greatly hinder business for low end television manufacturers like Syntax. Other Tier -1 manufacturers such as Samsung or Sharp might eventually enter the low end market too. A shake out of lower end brands in the television market is inevitable.

If individuals truely feel compelled that Syntax-Brillian is a great value and believe the $15 price targets set by the analysts/co-managers of the secondary offering, I do not discourage them from buying more. However my advice is to becareful when buying on margin and where you set your stop loses. Heh. I believe many learned a lesson today.

Also, Samuel is my real name but Sanmina is not last name. It is alluding to Sanmina-SCI Corp. (SANM) which I have a slight indirect relation with.

Oh, for those individuals that believe articles such as this one really have any effect on the stock price of BRLC, you are truelly mistaken. If my article could move the stock by 2 pennies that I would be atonished. However, these articles are a good way to present different sides of the arguement.