1 Reason Why I Can't Bring Myself to Touch Newsmax Stock With a 10‐Foot Pole
Newsmax made headlines with its public debut under Regulation A+, opening its shares to all investors. On the first day of trading, the stock price exploded, climbing over eight times its starting value before closing at $83.51 per share. The dramatic surge turned the media company into a so-called 'meme stock', with prices detaching from its actual financial performance.
The frenzy continued the following day, as shares jumped another 179%, briefly hitting $265 each. But the rally proved short-lived. Today, the stock trades at just over $9 per share—around 10% lower than its initial offering price.
Despite the sharp drop, Newsmax’s valuation remains unusually high compared to peers. Its enterprise value to sales ratio sits at roughly 5.1, far above competitors like Fox Corp. (2) and Sinclair (1.45). Analysts project the company will nearly break even by 2027, with earnings per share reaching $0.12 the following year. The volatility has left investors cautious. Until the stock’s price aligns more closely with its fundamentals, many see it as a risky bet. Meanwhile, industry figures like Brad Parscale, now Chief Strategy Officer at Salem Media Group, are positioning themselves in companies that could benefit from shifts in the media landscape.
Newsmax’s rollercoaster debut showcased the power of retail investor hype, but its long-term outlook remains uncertain. With shares now trading below their IPO price and profitability still years away, the company’s future depends on whether its valuation can stabilise. For now, the stock’s wild swings serve as a reminder of the risks in chasing speculative assets.
