A Newsmax booth hums with activity as attendees handle the guns displayed at the National Rifle Association’s annual gathering in Houston, Texas, on May 29, 2022.
Shares of the conservative news channel Newsmax plummeted over 70% on Wednesday, cutting short what had been a rapid ascent as a newly public entity. The stock nosedived by 72% during afternoon trades, reversing an astonishing 2,230% jump in just two days since its debut on the New York Stock Exchange. This brief rally had momentarily inflated the company’s market value to nearly $30 billion, surpassing industry giants such as Warner Bros. Discovery and Fox Corp.
Newsmax went public on the NYSE through a Regulation A offering rather than the conventional IPO route. This approach permits smaller companies to gather funds without the full SEC registration process, primarily targeting retail investors. In Newsmax’s case, about 30,000 retail investors jumped on board. The stock caught the eye of retail traders who, in online forums, likened it to the “New GME”—a nod to GameStop’s 2021 meteoric rise, which became a landmark in speculative trading.
One factor contributing to the stock’s volatility is its limited “float,” or the number of shares available for public trading. Only less than 6% of Newsmax shares, which translates to 7.5 million out of a totally diluted 128 million shares, are tradeable by the public.
Although the conservative news channel’s ratings have climbed, especially with the election of Donald Trump and other Republicans, it still trails behind Fox News. On the whole, Nielsen reports that Newsmax is among the top 20 cable networks in terms of average viewership during both prime time and daytime slots.
