Newsmax Stuns Market With Stellar NYSE Debut, But Retail Traders Are On The Backfoot
Shares surged 735% on Monday and pushed the TV news network’s market cap to nearly $11 billion.
FollowNewsmax, Inc (NMAX) stock surged a whopping 735% on its market debut on Monday and was the top trending ticker on Stocktwits early Tuesday, even as retail investors took a highly bearish view.
The U.S. cable news network, known for its conservative leaning, opened at $14 after pricing its shares at $10 in the initial public offering (IPO), before closing at $83.51.
The rally pushed the company's market capitalization to $10.7 billion, surpassing the $8.1 billion market capitalization of newspaper publisher New York Times (NYT). The stock extended gains in after-hours trading.
Factors such as limited shares on offer and the company's alignment with President Donald Trump and the Republicans are seen to be boosting the stock.
The channel gained prominence by strongly supporting Trump, particularly during and after the 2020 U.S. presidential election, and frequently features his party's politicians on its shows.
However, according to an ongoing Stocktwits poll, 55% of more than 1,400 respondents believe that Newsmax is now overvalued and that the stock might eventually lose steam.
Among the concerns is that traditional cable TV is on a downward trend as consumers have fled to streaming services in recent years.
Newsmax, which competes with Fox News, MSNBC and CNN, is the number 4 cable news channel in the United States, its founder and CEO Christopher Ruddy told the media.
Ruddy, a former NY Post journalist, founded Newsmax in 1998 as a digital offering before it became a cable TV network in 2014.
The company announced the IPO in September and completed it last week, raising $75 million by selling 7.5 million class B common shares.
In February, Newsmax raised $225 million through the private placement of its shares.
Most of Newsmax's revenue comes from advertising, according to company disclosures.
It recorded a $72 million net loss on $171 million revenues in 2024, compared to a $42 million net loss on $135 million revenues in 2023.
On Stocktwits, the retail sentiment opened in the 'extremely bearish' territory, with high message volume.
Comments were mixed. One bullish user asked why the stock was gaining after-hours if the rally was supposed to subside.
Another said it's risky to buy the stock at an apparently high point and hold it just as Trump is expected to announce an update on his tariff policies.
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