Newsmax Stock Soars Following Its IPO Launch

Dedicated Newsmax viewers who heeded the channel’s calls last year and purchased $10-per-share stocks in the company are seeing substantial gains at present. These shares have surged to almost $200 each recently.

This week’s initial public offering has been hugely successful for the pro-Trump talk and news channel, which had previously lagged behind in a market largely controlled by Fox News.

Chris Ruddy, the CEO of Newsmax—who has become a billionaire on paper due to the stock's remarkable surge—told GudangMovies21, "In the last election, Americans chose to go against the established media, much like how investors have shown their support for us by significantly purchasing our stocks, indicating that they appreciate what we do and wish for our continued growth."

Newsmax now finds itself with ample resources for expansion. Yet, due to excessive enthusiasm from investors, several media organizations have labeled it as a "meme stock." On Monday, the stock finished at $83.51 and skyrocketed almost threefold to reach $233.00 on Tuesday. Nevertheless, shares experienced a decline during extended hours of trading, prompting certain financial experts to forecast an eventual return to more typical levels.

Moreover, investors should proceed with caution. The realm of cable news isn't shouting "expansion." Newsmax's finances are quite poor. Additionally, the firm has significant legal hurdles coming up soon.

Newsmax decided to go public and raise funds partially because of the defamation lawsuits filed against the network following the 2020 election.

Both Dominion Voting Systems and Smartmatic alleged that Newsmax and various conservative media platforms spread false claims regarding purported voter fraud as part of Trump’s efforts to contest his defeat in the 2020 presidential election.

Ruddy couldn’t possibly come up with anything close to the $787.5 million that Fox shelled out for Dominion back in 2023. However, what if he decided to air infomercials on NewsMax instead and managed to persuade his audience to put their money into it?

In mid-2024, that was his approach. His appeals were quite direct. Broadcasters mentioned stuff such as "We wish for your role as a co-owner" and Newsmax expressed interest in having him contribute to maintaining America’s safety and strength." On occasion, Ruddy featured in these advertisements on television. Realizing that an exclusively televised channel wouldn’t typically spark much enthusiasm among investors on Wall Street, he emphasized Newsmax’s streaming initiatives and podcast offerings instead. Additionally, he compared his IPO strategy to that of Trump’s media venture shares.

Considering Newsmax’s limited scale, poor television viewership, and track record of operating at a loss — with a deficit of $72 million in 2024 — many observers within the industry doubted whether their IPO strategy could succeed. Over last summer, Mediaite quoted internal sources from Newsmax, describing the move as "a bid to avoid financial collapse amid two significant defamation suits that threaten the network’s future."

During the proceedings last autumn, a legal representative from Newsmax described the lawsuit filed by Smartmatic as a "bet-your-company case" for their organization. However, the opposing parties ultimately reached a settlement amounting to $40 million. It’s worth noting that Newsmax settled with just half of this sum initially; the remaining balance was scheduled to be paid off by July. Additionally, Smartmatic retained the right to purchase shares in Newsmax.

The settlement along with "associated legal fees totaling $76.9 million" contributed significantly to Newsmax’s financial losses in the previous year, as stated in SEC documents. However, the television advertisements promoting the initial public offering proved effective. Despite the cautionary statement in their prospectus regarding Dominion’s demand for $1.6 billion in damages, the network managed to attract numerous new viewers.

A significant preliminary hearing in the Dominion lawsuit took place about a week and a half prior, with a jury trial set to commence in Delaware on April 28th, unless an agreement is made beforehand. (Newsmax has denied libeling anybody in 2020.)

Newsmax’s television viewership stays fairly limited. Moreover, those who do watch can easily notice that the content appears low-budget. However, perhaps "Monday's dramatic surge," as Deadline described it, could genuinely alter Newsmax’s trajectory in the future.

Given its present stock price, Newsmax boasts a market capitalization of $20 billion, placing it tantalizingly close to Fox Corp., which holds a market cap of $24 billion.

Fox executives would likely dismiss such a comparison because Fox Corp operates as a broad media conglomerate with various interests including sports and other holdings, whereas Fox News outperforms Newsmax by a factor of ten in terms of daily viewership ratings.

However, at present, individual investors are driving Newsmax to become one of the most fluctuating stocks in the market. Additionally, Newsmax’s television programs keep promoting the stock value. "NEWSMAX STOCK REACHES $233 PER SHARE," an on-screen message announced following Tuesday's market closure.

It has only been 'two days,' Ruddy mentioned during a promotional television spot, and 'the level of interest we're receiving is simply astounding.'

He mentioned that among those showing interest was President Trump, who sent him a "kind message" on Monday evening "to congratulate both myself and Newsmax for our achievement."

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