Why Shares of Newsmax Are Up More Than 1,123% Since Its IPO

Class B shares of the right-leaning media outlet Newsmax (NYSE: NMAX) have blasted more than 1,123% higher since its initial public offering on March 31. The stock appears to be trading like a meme stock: Shares had roughly doubled today at 1:13 p.m. ET.

This small cable news network is off to the races

Newsmax, a smaller cable news network, started with a very small IPO. The company raised $75 million at $10 a share, according to Reuters. By the time shares closed yesterday, the stock had vaulted to over $82 per share. Today, there is no sign of slowing, and this comes right after the much-anticipated artificial intelligence data center company CoreWeave just disappointed with its IPO.

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Newsmax has the fourth-largest cable news audience in the country and averaged 211,000 daytime viewers and 309,000 prime-time viewers, according to Nielsen data reported by CNBC. But that's nothing compared to Fox's 3.1 million prime-time viewers.

"Americans for a long time have been voting with their remote controls, downloads, apps to say they want Newsmax. Now investors powerfully are buying Newsmax shares because they like us, they value us and they want us to keep growing," Newsmax CEO Christopher Ruddy told CNBC. "We're going out with a market cap of $1.2 [billion]. But we don't see ourselves as a value stock. We see ourselves as a growth stock. So those multiples are going to be a lot higher."

Another Trump-powered meme stock

Newsmax is clearly another meme stock powered by the popularity of President Donald Trump. The network has long supported Trump, and other media companies linked to Trump have seen similar success.

In 2024, Newsmax grew total revenue nearly 27%, but its net loss grew by 71% to over $72 million. The stock trades at a market cap of roughly $15.6 billion, which is why I would stay far away from this one.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.