Shares of conservative cable news network Newsmax continued their extraordinary ascent Tuesday, surging more than 120% in early trading and pushing the company's market capitalization past $16 billion. The move follows a staggering 735% gain during Monday's debut session on the New York Stock Exchange, where the stock opened at $14 and closed at $83.51.
The rally lifted the paper wealth of CEO and founder Christopher Ruddy, whose holdings now top $6 billion. Ruddy, who owns 39.2 million Class A shares and 81.4% of the voting stock, has long positioned Newsmax as a right-leaning alternative to Fox News, and said Monday on CNBC's Squawk Box that the IPO "provides us with the capital and financial freedom to accelerate our growth initiatives, expand our programming and further enhance our digital presence."
Newsmax raised $75 million in its IPO and has since become one of the most volatile names in media trading. Shares were priced at $10 on Friday and soared to nearly $190 by Tuesday morning.
The company, founded in 1998, transitioned from a digital media outlet into a cable television network in 2014. It now ranks as the fourth-most-watched U.S. cable news network behind Fox News, MSNBC, and CNN. According to Nielsen, Newsmax averaged 309,000 primetime viewers and 211,000 daytime viewers between December 30 and March 20. Fox News, by contrast, drew 3.1 million in primetime and 2 million during the day over the same period.
Despite the headline-grabbing valuation and capital infusion, Newsmax faces significant legal and operational risks. The company is currently fighting a $1.6 billion defamation lawsuit from Dominion Voting Systems over its 2020 election coverage. It recently settled a similar claim from Smartmatic, agreeing to pay $40 million - half of which has already been paid, according to regulatory filings.
The company also disclosed "material weaknesses" in its internal controls over financial reporting, warning in its 10-K filing that it may not detect a material misstatement "on a timely basis." Newsmax reported $171 million in revenue for 2024, a 26% increase from the prior year, but posted a $72 million net loss.
