January 15, 2016 (Shareholders Foundation) - An investigation on behalf of investors of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) shares over potential securities laws violations by Tower Semiconductor Ltd. and certain of its directors and officers in connection certain financial statements was announced.

The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) concerning whether a series of statements by Tower Semiconductor Ltd. regarding its business, its prospects and its operations were materially false and misleading at the time they were made.

Tower Semiconductor Ltd. reported that its annual total Revenue rose from $505.01 million in 2013 to $828.01 million in 2014 and that its Net Loss of $107.66 million in 2013 turned into a Net Income of $4.26 million in 2014.

Shares of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) grew from $3.95 per share in late 2013 to as high as $18.29 per share in March 2015.

On January 14, 2016, Spruce Point Capital Management published a report on Tower Semiconductor Ltd entitled 'Leaning Tower of Losses.'
Among things, Spruce Point Capital Management alleged that 'Evidence Suggesting [a] Brazen Accounting Scheme to Forestall [a] Bankruptcy Threat.' Per Spruce Point's report: 'Tower may have heavily promoted [a joint venture deal with] Panasonic . . . to inflate its stock, and convert its Series F debt to equity to relieve its debt burden. We have evidence to suggest Tower inflated the value of the [joint venture's] assets from approx.. $100m to $300m in order to inflate a bargain purchase gain to bolster its equity. Furthermore, Tower has engaged in other questionable accounting maneuvers to give the appearance of strong Non-GAAP gross margins, profitability, and free cash flow such as: 1) Shifting COGS expenses to R&D and SG&A; 2) Changing the presentation of capex from 'gross' to 'net'; 3) Extending the useful life of its assets to reducing depreciation expense; 4) Excluding depreciation and amortization to present Non-GAAP results (not industry standard); 5) Haircutting its convertible and bank debt by inappropriately interpreting the accounting guidance.

Shares of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) declined on January 14, 2016 to as low as $10.66 per share.


On January 15, 2016, NASDAQ:TSEM shares closed at $11.50 per share, which is significantly below its current 52 week High of $18.29 per share.