Newsmax's stock value crashes after hype peaks
- Newsmax started trading at $10 and saw its stock price soar to $279 within two days.
- The market cap of Newsmax fluctuated significantly, leading to an 80% decline within days.
- Despite this drop, the company still rang the opening bell at the New York Stock Exchange, reflecting the ongoing volatility.
In the United States, the cable channel Newsmax experienced a volatile and dramatic start in its trading on the New York Stock Exchange. Following its initial public offering on Monday, April 1, 2025, Newsmax began with a share price of $10, which quickly escalated to $14 and then saw a remarkable surge to $279 by Tuesday, April 2. This sudden spike brought the company’s valuation to an astonishing $30 billion, surpassing the well-known Fox News network by $5 billion. However, the following day marked a tumultuous decline for Newsmax as its share price plummeted by 80%, resulting in a market cap that now stands at approximately $6.7 billion. The rapid and extreme fluctuation in the stock price has raised concerns among financial experts who categorize such occurrences as indicative of ‘meme stocks,’ where the value is driven more by internet trends and social media buzz than by traditional business evaluations and fundamentals. Past examples of meme stocks include Donald Trump’s DJT media company, which similarly enjoyed a brief surge despite having minimal actual revenue. The volatile behavior of Newsmax shares coincided with the company’s significant financial challenges, including a reported $72 million loss in the previous fiscal year, and ongoing legal battles with Dominion Voting Systems, likely contributing to the uncertainty surrounding its long-term viability. Interestingly, while the stock value declined dramatically, Newsmax still carried out the ceremonial act of ringing the opening bell at the New York Stock Exchange on the morning of Thursday, April 3, 2025. This event contrasted sharply with the broader market's downturn influenced by Trump's recent trade war announcements, fueling speculation about the future trajectory of this emerging media company.