Shares of conservative news outlet Newsmax surged an impressive 180% as it continued to build on its significant gains following a strong debut on the New York Stock Exchange. The stock quickly gained traction among retail investors, becoming the top trending ticker on social media platform StockTwits since its launch, reflecting trends similar to other popular retail stocks, known as meme stocks.
After raising $75 million in its recent "mini IPO," the cable news operator aims to broaden its audience following the President's return to the White House earlier this year. Peter Andersen, founder of Andersen Capital Management, remarked that the current political volatility provides an opportune moment for Newsmax's launch, suggesting that the number of conservative investors is greater than the market had anticipated.
By the end of the day, Newsmax's stock reached $234 per share, marking a $150 increase from the previous day's close and nearly double its opening price. This follows an IPO price of $10, reflecting an eightfold gain after the initial offering and elevating the cable news network's market value to $28.3 billion.
Similar stocks, including video-sharing platform Rumble and Trump Media & Technology Group, experienced spikes leading up to the presidential election last year as investors speculated on Trump's prospects. Art Hogan, a market strategist at B. Riley Wealth Management, noted that this surge mirrors the pattern seen with Trump-related stocks, emphasizing the astronomical trading volume where shares are frequently bought and sold.
In early trading, Newsmax shares valued at approximately $147 million changed hands, surpassing those of JPMorgan. By day's end, trading volumes exceeded 10.9 million shares, significantly higher than the 7.5 million shares sold during the IPO.
Dann Ryan, managing partner at New York-based Sincerus Advisory, characterized the situation as typical for a meme stock. However, sentiment about Newsmax on Reddit, a prominent platform for influential stock enthusiasts, was mixed. Some users embraced its anti-mainstream media stance, while others expressed concerns about the rapid and substantial nature of its rally, especially given its unprofitable status.
The company’s revenue is on the rise, yet its losses are also increasing, with a reported loss of $72.2 million on roughly $171 million in total revenue for 2024, compared to a loss of $41.8 million on revenue of $135.3 million in 2023.
Founded in 1998 by Christopher Ruddy, Newsmax began as a digital brand before launching its cable news channel in 2014 and offers free streaming via its app and platforms like YouTube. Ruddy retains full ownership of Newsmax's Class A shares and a 30.6% stake in the Class B shares, with the value of his Class B holdings exceeding $9.1 billion as of Tuesday's close.
During his first administration, Trump endorsed Newsmax, frequently criticizing other media outlets for their coverage of him. In March, Newsmax agreed to pay $40 million to settle defamation allegations brought by voting technology firm Smartmatic, which claimed the outlet falsely reported that it assisted in rigging the 2020 U.S. election. Another voting technology firm, Dominion, has also sued Newsmax for similar defamation claims seeking $1.6 billion in damages, although Newsmax has denied these allegations. This case is set to proceed to trial in Delaware in April.
The anticipated rebound in the U.S. IPO market has been tempered by uncertainty surrounding Trump’s tariff policy and concerns about a prolonged trade war.