Newsmax Stock Craters Nearly 50% After Sizzling IPO

Forbes

In the third act of its dramatic debut as a public company, conservative media company Newsmax faced a harsh reality as its stock lost a sizable chunk of its early gains, though it remains valued favorably compared to comparable companies, with one notable exception: The parent of President Donald Trump’s Truth Social.  Read the full story on Forbes: https://www.forbes.com/sites/dereksaul/2025/04/02/newsmax-stock-craters-nearly-50-after-sizzling-ipo-but-valuation-still-tops-new-york-times-other-media-peers/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, the wild surge of Newsmax, the conservative news outlet that has taken

00:05Wall Street by storm.

00:08Just days ago, Newsmax made its debut on the New York Stock Exchange, and the reaction

00:12was explosive.

00:13The stock price soared over 700% on its first day.

00:18By Monday's close, the company's valuation hit a jaw-dropping $10.7 billion.

00:24This monumental IPO surge instantly minted Newsmax founder and CEO Chris Ruddy as a billionaire.

00:31On Tuesday, the Newsmax stock continued its unprecedented climb, soaring 180% to end Tuesday's

00:37trading at $234 per share, up from $10 Monday morning.

00:43This second wave of investor frenzy propelled Newsmax's market capitalization to over $30

00:49billion, surpassing the market cap of media giant Fox Corporation.

00:53The sheer speed of these gains triggered multiple trading halts.

00:57On Monday, trading was paused 12 times.

01:00This continued on Tuesday with at least five more trading halts as the price swung dramatically.

01:05However, by Wednesday morning, Newsmax shares plummeted by as much as 50% to under $120

01:12before slightly recovering to a 45% loss.

01:16The company's market capitalization fell by over $10 billion, from $20.7 billion to $11

01:22billion, according to Yahoo Finance.

01:25Despite the significant drop, Newsmax's stock remains approximately 1,200% higher than its

01:31initial public offering price of $10.

01:34So what's fueling this extraordinary investor appetite?

01:38Several factors seem to be at play.

01:40First, there's clear retail investor enthusiasm for conservative media companies, mirroring

01:45the volatile but ultimately high-interest IPOs of Trump Media, the parents of Truth

01:50Social and Rumble.

01:52These platforms appear to resonate strongly with a particular segment of the market.

01:57Second, Newsmax CEO Christopher Ruddy has voiced confidence in the company's growth

02:01potential, even suggesting it's a growth stock.

02:04Increased fees charged to TV distributors to carry the network may also signal perceived

02:09value.

02:10It's important to note that Newsmax has faced legal challenges, including a recent

02:14settlement with Smartmatic over 2020 election claims and an ongoing lawsuit with Dominion

02:20Voting Systems.

02:21However, these legal headwinds don't appear to be deterring investors at this moment,

02:26who seem more focused on the company's market position and future prospects.

02:31Newsmax also enjoys a higher-than-usual price-to-sales ratio.

02:34In 2024, Newsmax reported a $72 million net loss on $171 million of revenue, meaning its

02:43price-to-sales ratio is a sky-high 63.9.

02:47The S&P 500's average price-to-sales ratio is 2.9, according to FaxSet, meaning that

02:53Newsmax enjoys a more than 22 times premium compared to the average stock listed on the

02:58Bellwether U.S. Stock Index.

03:01The estimated value of Newsmax CEO Christopher Ruddy's 31% stake in the company as of Tuesday's

03:07closing price is $9.2 billion.

03:11While Newsmax surpassed Fox's market cap, Ruddy's fortune likely still trails that

03:16of Rupert Murdoch, as the former Fox Corporation chairman has an estimated net worth of $22.5

03:22billion.

03:24What do you think about the Newsmax stock explosion and its valuation surpassing Fox?

03:29Is it a sign of a changing media landscape?

03:32For more on these stories, check out Antonio Pecchino and Giacomo Tonini's articles linked

03:36in the description.

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