Newsmax has quickly secured its place as a “meme stock” after its highly anticipated IPO debut on Monday, sending shockwaves through the market. In just two days since its launch, the media company’s stock price skyrocketed by an extraordinary 2,190%, pushing its market capitalization to over $20 billion. This surge has turned Newsmax’s founder and CEO, Chris Ruddy, into a paper billionaire and elevated the company’s worth beyond traditional media giants like The New York Times and nearly on par with Fox Corporation, which owns the conservative powerhouse Fox News.
What’s Driving the Surge?
The unprecedented rally has left many industry observers wondering what’s behind the meteoric rise. Experts suggest the limited number of shares offered in Newsmax’s “mini IPO” could be a key factor. With a smaller share float, stocks tend to be more volatile, and investor demand for a relatively small number of shares can drive large price swings.
Newsmax sold 7.5 million shares at $10 each, raising $75 million in the process. To put that in perspective, nearly 9 million shares were traded just hours into the first day of active trading on Tuesday at 3:02 p.m., signaling intense retail interest.
“Given its small float, this stock is prone to large price movements, which is typical of meme stocks,” said Paul Hickey, co-founder of Bespoke Investment Group, in an interview. “There’s not a lot of stock available, so when demand increases, it can create these big moves.”
Retail Investors Drive Momentum
Retail investors, many of whom flock to platforms like Stocktwits, have been fueling the stock’s rapid ascent. Newsmax has dominated the site’s trending tickers, with users expressing excitement over the massive gains.
“This is greed to the max,” one user posted, hinting at skepticism about the sustainability of the current gains. “Enjoy the speculative ride for now.”
A Conservative Media Boom
The stock rally comes at a time when conservative news outlets, particularly those aligned with former President Donald Trump, are experiencing a surge in popularity. Trump, a frequent guest on Newsmax, has helped boost the network’s viewership. While Newsmax remains a distant second to the dominant Fox News, the network’s popularity has been steadily rising, especially since the 2024 election.
Despite the boom, Newsmax is not without its financial challenges. The company reported $171 million in revenue for 2024 but also posted a $72 million loss.
Earlier this year, Newsmax raised an additional $225 million through a private offering of preferred shares. The company now trades on the New York Stock Exchange under the ticker symbol “NMAX.”
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