AXTI - AXT: Selloff Provides Buying Opportunity

2024-04-04 21:56:17 ET

Summary

• A plethora of allegations raised in a new shortseller report caused AXT, Inc.'s shares to crater by 35%.
• The core short thesis is centering around the risks resulting from a potential failure to list Chinese subsidiary Tongmei on the Shanghai Star Market.
• However, these risks have been adequately disclosed by the company in recent years and should be well-known among market participants following AXT more closely.
• In addition, the company's business is showing early signs of life after a couple of abysmal quarters with analysts projecting a full-blown recovery for next year.
• In my opinion, Thursday's selloff provides speculative investors an opportunity to initiate positions in a recovering business driven by exposure to the red hot data center and AI market. Should AXT execute at least in line with current analyst expectations, the stock might approach $6 next year.

On Thursday, shares of semiconductor substrate provider AXT, Inc. or "AXT" ( AXTI ) cratered 35% after shortseller outfit JCapital Research or "JCapital" published a damning report headlined " AXTI may be on the brink of collapse ":

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