Newsmax, the conservative cable news network, made a stunning debut on the New York Stock Exchange on Monday. Shares of the company skyrocketed by an astonishing 735%, closing at $83.51 after being offered at $10 apiece in the initial public offering. The company raised $75 million by selling 7.5 million shares.
The trading frenzy led to repeated halts in the stock due to volatility. By the end of the day, Newsmax had a market value of $10.7 billion based on the outstanding shares listed in its SEC filing. Individual investors appeared to be the driving force behind the surge, with Newsmax ranking among the 25 most actively traded stocks on Fidelity’s platform.
Buy orders outpaced sell orders by more than two to one. The stock’s performance drew comparisons to the meme stock craze of 2020 and 2021, when retail traders sent shares of companies like GameStop soaring. Despite the impressive debut, Newsmax’s financials paint a different picture.
newsmax stock debut success
The company lost more than $55 million in the first six months of 2024 on revenue of around $80 million. It also had total liabilities of $142 million compared to $69 million in assets.
The IPO has made Newsmax founder and CEO Christopher Ruddy a billionaire, with a fortune estimated at $3.3 billion. Ruddy, a former journalist at the New York Post, founded Newsmax in 1998 as a conservative news website before expanding into cable news in 2014. Other major investors in Newsmax include Interactive Brokers Group founder Thomas Peterffy, Qatari royal Sheikh Sultan bin Jassim Al-Thani, and Ukrainian industrialist Vadim Shulman.
Despite its recent success, Newsmax still lags behind Fox News in ratings and revenue. Ruddy sees an opportunity to compete with Fox News in the “center-right market.” He stated, “I think there was a demand for more competition against Fox.” Newsmax currently ranks as the fourth-largest cable news channel in the United States, behind Fox News, MSNBC, and CNN. As Newsmax went public, Ruddy downplayed the network’s pro-Trump leanings, despite the company reaching a $40 million settlement last year with Smartmatic over false claims that the voting machine company helped rig the 2020 presidential election.
Ruddy said, “We believe we’re conservative with an independent news mission and ask tough questions of the Trump administration.”
Photo by; Anthony Esau on Unsplash
