AXT shares drop 6.5% after announcing a public stock offering to fund subsidiary expansion.

AXT Inc announced a public offering of common stock, causing its shares to fall 6.5% in after-hours trading. The company plans to use the proceeds primarily to support its subsidiary Beijing Tongmei Xtal Technology Co. in expanding production capacity for indium phosphide substrates for global export. Despite the stock's strong gains over the past year, the offering introduces new shares, which typically dilutes existing holdings. The size and terms of the offering were not disclosed, but underwriters have a 30-day option to buy up to an additional 15% of shares.