Newsmax (NMAX) stock dropped as much as 20% premarket Wednesday after a massive post-IPO surge saw shares soar from $10 to $233.

Newsmax is a conservative cable news outlet and Fox News alternative that was founded in 1998 by CEO Christopher Ruddy, a media mogul and friend of US President Trump. The company — which also owns subsidiaries that sell nutritional supplements and insurance advertised in Newsmax’s newsletters — raised $75 million in its IPO Friday, with shares priced at $10. Newsmax had previously raised $225 million in a private offering in February.

The stock surged a staggering 735% Monday and nearly 180% Tuesday, rocketing its market cap from $1.2 billion upon its market debut to more than $20.8 billion at Tuesday’s close, showing the Trump trade still has room to run in some cases just as the president's tariff policies slam the market at large. 

Newsmax's market cap at Tuesday's close was higher than those of Wall Street Journal parent News Corp (NWSA) and AI server maker Super Micro Computer (SMCI).

Newsmax is unprofitable. While the company’s revenue jumped more than 26% to $171 million in 2024 from the prior year’s $135 million, its loss increased nearly 73% to $72 million from the prior year’s loss, according to Newsmax’s 10-K SEC filing. The company also said in its filing that it has identified "material weaknesses" in its financial reporting controls such that there may be "a material misstatement" in its financial statements that it may not detect "on a timely basis."

Newsmax’s massive upswing has prompted various media outlets to draw comparisons to the meme-stock craze of 2020 as well as the notoriously volatile stock of Trump Media & Technology Group (DJT). On Monday, trading of Newsmax stock was halted at various points due to volatility.

REUTERS / Reuters

Newsmax is facing an ongoing lawsuit from Dominion Voting Systems seeking $1.6 billion in damages related to false claims it made in its coverage of the 2020 election, which Newsmax cited among risk factors to its business in its latest 10-K filing to the SEC. Newsmax settled another lawsuit with another election tech company, Smartmatic, in 2024 for similar claims and has paid $20 million of the $40 million settlement thus far, according to the filing.

Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.

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