The Newsmax IPO Story Ended About How Anyone With a Brain Would Expect

For 36 glorious, brain-cell-deficient hours, Newsmax was the new Tucker Carlson stock equivalent of conservative media. The kind of ticker your gun-loving-uncle who owns three MyPillow products would call “the next Amazon.” Then the stock dropped like a fly.

Just two days after its IPO, Newsmax shares crashed 68%, erasing over $17 billion in market value and sending the price tumbling from a high of $233 down to around $73 (as of right now). If you’re thinking “well, that was quick” you’re not alone.

Yesterday, Newsmax briefly leapfrogged Fox Corporation in market cap. Let that sink in. Fox (the parent of Fox News, Tubi, and Fox Sports) made $13.98 billion in revenue last year and hauled in $1.2 billion in net income. That’s actual cash. Real money. Not theoretical “growth potential.” But for a fleeting moment, Newsmax (the company known for peddling sleep supplements and post-election conspiracy theories) was more valuable.

Newsmax, by contrast, brought in $171 million in revenue in 2024 (up from $135 million the year before) but also racked up $72 million in net losses, a 73% increase in red ink. Oh and it’s also losing all credibility. The company admitted in its SEC filing that it has “material weaknesses” in its financial reporting systems, which could lead to “material misstatements” it may not catch “on a timely basis.”

And trust me, there’s more. The legal team over at Newsmax has been busy… because they’re being sued for $1.6 billion by Dominion Voting Systems, who claim Newsmax knowingly broadcast false information about election fraud involving Dominion machines. If that wasn’t enough, they already cut a $40 million check to settle a similar defamation lawsuit from Smartmatic, another voting tech company. And by “cut a check,” we mean they’ve paid $20 million of it so far and still owe the rest. All of that is clearly spelled out in their 10-K under “Risk Factors,” which at this point is scarier than a true crime book.

And yet, even with all of these flaming red flags that everyone decided to ignore, the stock launched like a penny stock that just struck a major deal with Apple. Newsmax IPO’d last Friday at $10, raising $75 million. By yesterday’s market close, the stock had shot up 2,230%, hitting $233. That inflated its market cap to $20.8 billion… putting it ahead of media giants with actual journalism departments and balance sheets with real green profit numbers.

For about 36 hours, Newsmax was trading like it was the next Netflix. Except instead of original content and streaming rights, they have Bill O’Reilly guest segments and infomercials straight out of the 90s. Then came the crash.

By this morning, retail traders started doing something unusual… reading. The buy orders slowed, Reddit threads quieted, and suddenly the stock fell to $73. That brought the market cap down to $5… which, hilariously, is still absurd. Even after the drop, Newsmax’s price-to-sales ratio is 63.9x. The S&P 500 average? 2.9x. Fox, a company with actual quarterly earnings and less courtroom problems, trades at 1.7x. The New York Times? 3.2x. Nexstar Media? 1.1x. Newsmax looks like it's being valued for curing cancer, not broadcasting Dinesh D’Souza documentaries.

Of course, if we’re going to talk about wild valuations, we can’t ignore Truth Social which lost $400 million last year on $4 million in revenue and still sits at a $4.5 billion valuation. Its P/S ratio? 807x. So if Newsmax is delusional, it’s not exactly lonely.

Still, Newsmax CEO Chris Ruddy, told CNBC earlier this week that the company is a “growth stock.” And hey, technically he’s right. Revenue did grow 26% last year. But growth only gets you so far when your financials are sketchy, your legal liabilities are a mile long, and your valuation still makes zero sense after a 73% drop.

There’s not much to really say at this point other than, maybe don’t YOLO into IPOs when there’s no actual value behind the business.

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Stock.News has positions in Amazon and Apple.