AXT Inc's stock experienced a sharp decline of 11.38% during the after-hours session on Monday. The material science company's shares fell significantly following key corporate disclosures that rattled investor confidence.

The after-hours plunge was primarily triggered by the company's announcement of a public offering of common stock. AXT stated it plans to offer and sell shares, with net proceeds intended mainly to support its subsidiary, Beijing Tongmei Xtal Technology, in expanding production of indium phosphide substrates, as well as for research and development and working capital. Equity offerings often lead to dilution concerns among existing shareholders, prompting sell-offs.

Further pressure came from the company's preliminary first-quarter financial outlook, which anticipated revenue between $26 million and $28 million and a net loss in the range of $1.6 million to $2.6 million, or $0.03 to $0.05 per share. This projection of a quarterly loss contributed to the negative investor sentiment during the extended trading session, as market participants reacted to the dual negative catalysts.