Shares of the right-leaning news organisation Newsmax surged by an additional 180 per cent on Tuesday, continuing their astonishing rise following a remarkable launch on the New York Stock Exchange. The stock has gained popularity among retail investors, consistently being the leading trending ticker on the retail investor-centric social media platform stocktwits.com since its launch, which traders noted resembles the trend seen with other highly traded retail favorites known as meme stocks. The cable news organisation, which garnered $75 million during its "mini IPO" last week, aims to broaden its audience after President Donald Trump's reentry into the White House earlier this year.
"Given all the current volatility in the political landscape, now might be the ideal moment for Newsmax to debut," stated Peter Andersen, the founder of Andersen Capital Management. "This showed that there are likely more conservative investors than the market had expected," he stated. By the conclusion of Tuesday, Newsmax's stock was priced at $234 per share, an increase of $150 from Monday's closing value and almost twice the $125.98 where it started its day. This compared to the initial public offering price of $10 and an eightfold increase following the offering on Monday, raising the market valuation of the cable news network to $28.3 billion.
Newsmax stock surges amid volatility
Shares of video-sharing platform Rumble (RUM.O) and Trump Media & Technology Group (DJT.O) surged ahead of last year's presidential election as investors anticipated a win for Trump. "This resembles almost precisely the same trend we observed with DJT," stated Art Hogan, market strategist at B. Riley Wealth Management. "The trading volume is enormous," he remarked. "The identical shares are being traded repeatedly." Approximately $147 million in Newsmax shares were traded in early transactions, surpassing those of JPMorgan (JPM.N), opening a new tab. At the close of the day, trading volumes exceeded 10.9 million shares, based on LSEG data. Merely 7.5 million shares were traded in the IPO. "This has all the attributes of a quintessential meme stock," stated Dann Ryan, managing partner of Sincerus Advisory, a financial advisory firm located in New York.
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Nonetheless, the chatter on Reddit - where many influencers have passionately supported stocks such as Trump Media and GameStop - was varied. While some accepted Newsmax's anti-mainstream media stance, others were cautious about the rapidity and scale of its growth, particularly since it is still not profitable. Although the company's income is increasing, its losses are also rising. In 2024, the company incurred a loss of $72.2 million on about $171 million in total yearly revenue, while in 2023, it faced a loss of $41.8 million on a revenue of $135.3 million. Established in 1998 by Christopher Ruddy, Newsmax began as a digital entity and introduced its cable news network in 2014. It additionally broadcasts for free on services like its Newsmax app and YouTube. Ruddy possesses all of Newsmax's Class A shares, which are not publicly traded, along with 30.6 per cent of the Class B shares. At the end of Tuesday, the worth of his Class B shares alone exceeded $9.1 billion.
During his initial term, Trump endorsed Newsmax while often condemning the coverage of him by other news organisations. In March, Newsmax agreed to pay $40 million to resolve allegations of defaming the voting technology company Smartmatic by disseminating false claims that it assisted in manipulating the 2020 U.S. election in favor of Democrat Joe Biden against Trump, as stated in a regulatory filing. A second voting technology company, Dominion, filed a lawsuit against Newsmax in 2021 for comparable defamation allegations and is pursuing $1.6 billion in damages. Newsmax has rejected the accusations. The trial is set to take place in Delaware in April. The anticipated recovery in the U.S. The IPO market has been dampened by the unpredictability stemming from Trump's tariff strategy and concerns over an extended trade conflict.
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