2 days Ago By Moneycontrol
Shares of the conservative network surged over 2,200% after its public debut, despite heavy losses, sparking comparisons to 2021’s retail trading mania and raising eyebrows across Wall Street. Christopher Ruddy, founder of the right wing cable network Newsmax and longtime friend of US President Donald Trump, has become a multibillionaire virtually overnight. The media company’s shares skyrocketed more than 2,200% since their Monday debut on the New York Stock Exchange, closing at $233 on Tuesday, up 179% in a single day.
Despite being a loss-making business in a declining cable TV market, Newsmax has reached a market capitalisation of over $20 billion—rivalling the much larger Fox Corp, the Financial Times reported. A meme-stock-style surge The dramatic rise in Newsmax’s share price mirrors the “meme stock” phenomenon that rocked US equity markets in 2021. Newsmax, which posted a $72 million loss on $171 million in revenue last year, now trades at a valuation far above what analysts say is justified.
The company listed its shares at just $10 each through a Regulation A+ offering, which allows smaller companies to raise capital with fewer regulatory hurdles. It raised $75 million via that route and secured another $225 million in private preferred shares earlier this year. Newsmax aggressively promoted its listing to viewers, urging them on-air to “Be an Owner of NEWSMAX!” through its site NewsmaxInvest.
com. Ruddy wrote last July, “Newsmax is rising because Americans like you are tired of incredible media bias.” Ruddy’s fortune and influential backers Ruddy, a former New York Post journalist who founded Newsmax in 1998, owns 39.
2 million class A shares—now worth an estimated $9.1 billion. His proximity to Trump’s Mar-a-Lago and prominent presence in conservative media circles have helped him build a powerful network.
Other major shareholders include: · Thomas Peterffy, billionaire GOP donor and Palm Beach resident, who owns 23 million class B shares. Despite his optimism about Newsmax’s future, Peterffy told the Financial Times he was “stunned” by the share price surge, saying it was not justified by fundamentals. · Sheikh Sultan bin Jassim al-Thani, a member of Qatar’s royal family, owns nearly 20 million shares, now worth $4.
7 billion. Legal baggage and political ties Newsmax has faced legal trouble similar to Fox News. The company settled with voting tech firm Smartmatic last year for $40 million over 2020 election coverage, and still faces a defamation lawsuit from Dominion Voting Systems, which is scheduled to go to trial this year.
Adding to the scrutiny, Newsmax recently appointed Alex Acosta—Trump’s former labour secretary who resigned amid backlash over his role in a plea deal for Jeffrey Epstein—to its board of directors. Scepticism mounts as hedge funds short the stock Despite the frenzy, some investors are betting the bubble will burst. Hedge funds are reportedly borrowing Newsmax stock at high interest rates to short it, expecting retail investors to cash out soon.
One hedge fund told the FT that a price correction is imminent. The valuation gap between Newsmax and more established players is stark: Fox Corp earned $14 billion in revenue in 2024, compared to Newsmax’s $171 million. Yet the two companies are now nearly equally valued on the stock market.
Newsmax’s explosive debut has made Christopher Ruddy a face of the latest retail trading boom. But with mounting legal liabilities, a volatile business model, and soaring share prices unmoored from financial performance, some investors believe the party won’t last. As one early backer put it: “It does not warrant this high price.
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