What happened Shares of semiconductor company AXT (NASDAQ: AXTI) surged by as much as 27.3% Tuesday. As of 3:10 p.m. EST, the stock was up by 21.2% The stock's gain followed the tech company's announcement of a strategic plan that will help it access China's capital markets and improve its cash position. Image source: Getty Images. So what As part of a complex deal, which investors can read about in full on the company's investor relations website, AXT will merge two of its raw material companies into its wafer manufacturing subsidiary in China, Beijing Tongmei Xtal Technology. AXT will then list shares of this subsidiary on the Shanghai Stock Exchange's STAR Market -- "an exchange intended to support innovative companies in China," explained AXT in its press release about the deal. "Pursuing a listing on the STAR Market gives us the ability to replenish our cash and increase our market value for our shareholders with minimal dilution," said AXT CEO Morris Young. "Further, the additional capital will strengthen our ability to compete for larger business opportunities." Several analyst upgrades may have also contributed to the stock's move higher. Following the deal announcement, Craig-Hallum and BWS Financial increased their price targets on AXT from $7.50 and $10 to $12 and $14, respectively. Now what Notably, going public on the STAR Market takes time. AXT, therefore, doesn't expect to list shares of this subsidiary until mid-2022. In addition, the deal will be subject to regulatory approval and other merger requirements. 10 stocks we like better than AXTWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AXT wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source