Newsmax (NMAX -27.11%) got hit with another day of steep sell-offs Thursday amid macroeconomic turbulence and an unfavorable court ruling. The company's share price ended the daily session down 26.8%.
The S&P 500 index fell 3.5% today as investors reacted to new tariffs on China that were even higher than expected. Newsmax's valuation also faced negative pressure from a court ruling that the company had published defamatory statements against Dominion Voting Systems.
A Delaware Superior Court judge ruled that Dominion presented convincing evidence that Newsmax had made false statements about Dominion's machines being used to forge or alter votes in the 2020 elections. Following today's sell-off, Newsmax stock is now down 69.5% from market close on the day of its initial public offering (IPO) at the end of March.
Newsmax stock skyrocketed on its first day of trading, and it managed to climb as high as $265 per share, thanks to gains in the next daily session. But the rally appears to have been largely powered by meme-stock momentum, and it's seen outsized sell-offs amid recent volatility for the broader market.
Despite being down big from its valuation peak, Newsmax is still up roughly 154% from its $10 per share IPO price -- and the stock looks like a poor investment right now. The media business posted a net loss of $72.2 million on sales of $171 million last year, and performance could weaken in the absence of election-related tailwinds. Making matters worse, Dominion's defamation case against Newsmax is now poised to head to a jury trial -- and the company might need to pay a substantial settlement or judgment to resolve the case.
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