Newsletter

Trading Alert: SBI Communications, Inc. (OTC BB: SBID)

February 15, 2001
Volume IV, Issue 15
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:
 

Trading Alert: SBI Communications, Inc. (OTC BB: SBID)

Today's trading alert is based on three major factors:

  • The press release which came out after the close puts a whole new light on this company, and will ultimately increase the company's size and profitablility by 300%.
  • We have had extensive discussions with management- this press release is the first in a series of very exciting developments coming out on this company over the next several weeks.
  • Technically, the stock is perfectly positioned for substantial appreciation on the heels of this news.
SBI Communications owns Valencia Entertainment. Valencia is an entertainment conglomerate which owns TV and Movie production studios in both New York and Southern California.

According to Vince Vellardita, the President and CEO, Valencia has been in business and operating profitably for many years. The year 2000 audit is being completed and will be released soon.

The CBS hit series JAG and Fox Family's Power Rangers are both produced on Valencia properties along with numerous other shows.

Today, shortly after the market closed, SBI announced they have signed a Letter of Intent to acquire Tri-Crown Productions, Inc. Tri-Crown is an independent production company that has produced shows for Aaron Spelling Productions, World-vision/Paramount, Prime/FOX Sports. FOX Family Channel,  Speed-vision, Outdoor Life and Univision. In addition Tri-Crown has produced weekly series and specials for ABC, NBC, CBS, FOX, FOX Sports, FOX Family, Warner Bros., Telemundo, Universal, Sony and Disney.

Tri-Crown owns its own library of shows which are continuosly creating cash flow for the company. Once shows are produced, on going syndication revenues have little costs, yielding high profit margins.

Mr. Vellardita informs us that both Valencia and Tri-Crown operated profitably in 2000, and he expects those profits to increase in 2001. The combined companies will have annual revenues of over $20 million, quite possibly as high as $30 million.

Entertainment content producers are in high demand. 10 years ago we all watched 3 major networks and one local station. Today, most of us have cable systems or direct TV with over 200 channels. Those networks need content, and this new company is positioned to provide supply for this new demand.
 

Trading Alert Details

As depicted in the chart, SBID has been in a nice uptrend since the stock sold off at the end of December. The lower trend line or "support line" demonstrates each low gets a little higher.

The news release should bring a nice surge of buying into the stock. The upper trendline shows resistance at $1.60. Therefore, a break above $1.60 tomorrow would be very bullish.

On that basis, here is our recommendation:

    *Buy up to $1.60
    *Target Price: Short Term: $2. If the stock can break above the December high of $2.20 it could go a lot higher.
    *Stop Loss: $1 or whatever risk you are comfortable taking. Please use a stop loss.
    *If the stock gaps up in the morning don't invest until it comes back down.
We don't normally provide any follow up on our Trading Alerts. They're designed for investors seeking short term trades. As a result of extensive discussions with the management of SBID, we expect to publish three or four follow up editions on this company if they produce the substantive fundamental developments management has indicated we will see over the coming weeks.
 

Below find the complete text of the press release for your review:
 
 
 
 
 
 

Thursday February 15, 4:05 pm Eastern Time
Press Release
SOURCE: Valencia Entertainment/SBI Communications, Inc.

Valencia/SBI Sign LOI to Merge Tri-Crown Productions
One Stop Entertainment Solution Created Through Merger

VALENCIA, Calif., Feb. 15 /PRNewswire/ -- Vince Vellardita, President and CEO of Valencia Entertainment/SBI Communications, Inc. (OTC Bulletin Board: SBID; Frankfurt XETRA: SE8) announced today that a letter of intent has been signed for the acquisition of Tri-Crown Productions, Inc. and certain of its affiliates. The acquisition is subject to the companies conducting due diligence and the signing of a definitive acquisition agreement. Closing is anticipated on or before June 30th, 2001. Tri-Crown Productions is an entertainment company that specializes in development, post-production and distributing its own original television programs and video/DVD.

Tri-Crown Productions presently enjoys annual revenues of approximately $15 million and holds assets that include a postproduction facility with equipment and a library of television shows and documentaries. The company is well established within the entertainment industry and has created programs for all major broadcast networks, cable networks and international networks during its 14-year history. Tri-Crown has produced weekly series and specials for ABC, NBC, CBS, FOX, FOX Sports, FOX Family, Warner Bros., Telemundo, Universal, Sony and Disney. Tri-Crown's library continues to grow with programs shot on location around the world.

Vellardita stated, ``Tri-Crown is an important link in completion of the company's business plan in making Valencia/SBI a one-stop studio. In a manner reminiscent of the mega merger of Time Warner and AOL, this corporate merger creates the standard 'one plus one equals three' result by using each company's unique scope of services and success to offer a greater multi-media, multi-service entity that will create a single-destination entertainment solution.''

Valencia Entertainment's core properties already host production for such popular TV shows as the hit CBS series ``JAG,'' and the Fox Family popular show ``Power Rangers.'' Valencia's clients include: Warner Bros., Paramount, Universal, MGM, HBO, NBC, Twentieth Century Fox, Disney, CBS, Sony, Showtime, and the USA Network.

``Tri-Crown Productions will be Valencia/SBI's partner in creation, production and distribution to help grow the company and increase revenues, thereby increasing shareholder value.'' Vellardita further stated, ``at the time of closing, with this acquisition the company anticipates revenues of approximately $25 million for 2001 and projected revenues of over $150 million over the next five years. Upon completion of this acquisition, the company will meet all requirements to apply for a National Nasdaq listing of the company securities with the exception of price.''

``We're elated at the prospects of the merger,'' Valencia concluded. ``Not only does it significantly improve the quality and volume of service we offer, but it enables us a corporate perspective to attain new heights in our listing and performance.''

About Valencia/SBI

Valencia Entertainment is a vertically integrated entertainment conglomerate that includes television production for network and syndicate, motion pictures, sports, Internet and real estate holdings. Valencia owns 30 acres of land located on both the east and west coast, and approximately 300,000 square feet of commercial buildings, which consists of ten film and production sound stages. The company recently purchased Half-Day Video, Inc. bringing in over a million in revenue, with over a million in real estate and television and film equipment to be rented out. The company has contracts in place to utilize the sound stages with Paramount Pictures for the hit CBS series ``JAG'' and Saban Entertainment for the Fox Family popular show ``Power Rangers.'' Valencia's clients include: Warner Bros., Universal, MGM, HBO, NBC, Twentieth Century Fox, Disney, CBS, Sony, Showtime, and the USA Network. For more information, visit the company web site: http://www.valenciaentertainment.com .

About Tri-Crown Productions, Inc.

Carol Sherman, former Head of Finance & Business Affairs for KABC, is the founder and CEO of Tri Crown Productions. Together with Jeff Androsky, President of Production & Development, the company started as the independent Production Company for ABC's daily prime access series EYE ON LA. Within two months Tri-Crown moved the consistently rated 3rd place rated series to #1 in its time period, and stayed #1 for every ratings period under their production tenure. Tri-Crown quickly build on that success by adding an elite post- production facility with 10 linear and non-linear digital edit bays, digital sound and graphics studio and stage facilities located in Burbank, California. Tri-Crown has produced daily series with Aaron Spelling Productions, World- vision/Paramount, Prime/FOX Sports. FOX Family Channel, Speed-vision, Outdoor Life and Univision. In addition Tri-Crown has produced weekly series and specials for ABC, NBC, CBS, FOX, FOX Sports, FOX Family, Warner Bros., Telemundo, Universal, Sony and Disney. Tri-Crown's library continues to grow with programs shot on location around the world.

Safe Harbor Statement

As a cautionary note to investors, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; SBI's ability to execute its business model and strategic plans; and the risks described from time to time in SBI Communications, Inc. Securities and Exchange Commission filings. 

SOURCE: Valencia Entertainment/SBI Communications, Inc. 
 



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