Newsmax shares pulled back 37.8% in morning trading on Wednesday after soaring 2,230% in its first 2 Days of trading.

Conservative media outlet Newsmax Inc.’s meme-stock moment has given it a market value greater than Fox Corp.’s, with shares surging 2,230% since its debut earlier this week.

The stock soared nearly 180% to close at $233 on Tuesday, building on a 735% surge in its debut session which saw the shares halted multiple times. Tuesday’s jump added $19.2 billion in market value as over 10 million shares swapped hands.

With a $30 billion market value, Newsmax has surpassed Fox, owner of its rival Fox News as well as media brands including Fox Sports and the Tubi streaming service. Newsmax’s on-air host roster includes Fox News alumni Greta Van Susteren and Rob Schmitt.

The spike has made the company’s largest holders exceptionally rich — on paper. Founder and Chief Executive Officer Christopher Ruddy owns nearly one-third of the company’s shares, worth $9.1 billion. That would rank him among the wealthiest Americans, according to the Bloomberg Billionaires Index, higher than prominent billionaires including Bill Ackman and Mark Cuban.

Interactive Brokers Group Inc. founder Thomas Peterffy owns the second-largest stake, now worth $5.4 billion.

The surge is reminiscent of the meme stock craze in 2020 and 2021, with investors piling into stocks to power eye-popping gains and leaving conventional estimates of their fundamental value far behind. In 2021 and 2022 shares of more than a dozen companies saw similar spikes immediately after their IPOs, many of which were tiny. Speculators on and off Wall Street drove the firms’ shares skyward, before ultimately plunging more than 90%.

“This is like the initial market reaction to DJT on steroids,” said Steve Sosnick, chief strategist at Interactive Brokers, referencing the surge in shares of President Donald Trump’s media company, Trump Media and Technology Group Corp., which trades under his initials.

“This is the newest entry into the pantheon of meme stocks,” Sosnick said. “Whether or not that persists, who knows, but it has all the hallmarks of a meme stock. There needs to be some sort of passion to enable investors overlooking fundamentals, and Newsmax fits that bill.”

‘Retail Bag Holders’

Individual investors traded barbs on the popular trader chatroom Stocktwits, where Newsmax’s symbol was the top trending ticker, throughout Tuesday.

Bullish investors posted memes mocking critics while others called it the “New GME” and touted their easy returns. Users posted memes and GIFs alongside calls for the shares to surge to $500 and even $1,000 apiece, without providing an investment thesis. One user called it “America’s stock” in a post that also included a GIF of a cartoon bald eagle gyrating in an American flag Speedo.

Bearish traders expressed a desire to short the stock while comparing it to previous high fliers that plunged, saying that “retail bag holders” were “being minted.”

Fidelity users were mostly buyers, with the stock among the five most popular with investors on Tuesday. Orders to purchase the stock topped those to buy shares of retail trader favorites Palantir Technologies Inc. and Amazon.com Inc.

Skeptics see Newsmax joining a cohort whose shares spiked in their first few sessions as a public company. Just seven other stocks ended their debut sessions up more than 700% after a US IPO in the past five years, delivering returns to well-timed trades. Such firms have been losers in the long run, with shares of the average company in the group down nearly 94% from their IPO prices, crashing roughly 99% from their respective peaks.

The gains give the company a market value of $30 billion based on the outstanding shares listed in a US Securities and Exchange Commission filing. That puts it above Warner Bros Discovery Inc. and Paramount Global and makes its valuation larger that of cloud-computing provider CoreWeave Inc. which raised $1.5 billion in an IPO just last week.

Newsmax reported $171 million in revenue last year, meaning it trades at a trailing price-to-sales ratio of around 175, calculations by Bloomberg show. That blows away the metrics for meme stocks GameStop Corp. and AMC Entertainment Holdings Inc., which peaked at four and 14 respectively, data compiled by Bloomberg show. However, it pales in comparison to the lofty levels once reached by President Trump’s media company, which soared well above 2,000 times ahead of his reelection.

Elsewhere, shares of Hong Kong financial services firm Waton Financial Ltd., which raised $17.5 million in an IPO that priced and traded on Tuesday, soared 396% and triggered at least 13 volatility halts in four hours of trading. The stock’s ticker, WTF, was mentioned across Stocktwits in posts mentioning Newsmax.

Facing Litigation

The cable network is still facing litigation that could impact its bottom line, over broadcasts claiming voting technology companies rigged the 2020 presidential election against Trump. Newsmax settled a defamation lawsuit with Smartmatic Corp. according to an announcement in September. A suit from Dominion Voting Systems Corporation Inc. is ongoing, however, its filing shows. Dominion is seeking as much as $1.6 billion in compensatory damages as well as punitive damages, and a trial is expected to begin as soon as April 28. Newsmax believes the case is without merit and will continue to defend against the suit, according to the filing.