Last month's significant 17.4% drop in Newsmax's stock, yet a modest recovery observed in July.
In a surprising turn of events, Newsmax's stock has seen a modest rebound in July, despite a weaker sales growth outlook for the year. The company's average watch time on its streaming platform surged by 36% compared to May 2024, and its free Newsmax2 streaming channel recorded a 25% year-over-year increase in total viewership, with over 21.5 million cumulative viewers [1].
The stock's recent uptick can be attributed to several factors. One significant factor is Newsmax's international expansion. The company's core channel is now available internationally through the Truth+ streaming platform, run by Trump Media. This move could potentially attract more viewers and investors, contributing to the stock's positive momentum [1].
Another factor is the strategic appointment of Paula J. Dobriansky, a foreign policy expert, to Newsmax's board of directors. Announced alongside an update on sales guidance, such appointments can enhance investor confidence in the company's leadership and future direction [1].
Newsmax's stock has experienced significant volatility since its Initial Public Offering (IPO) at the end of March. The initial meme stock trading drove a massive rally, but the momentum has since reversed, and the stock is now down roughly 67% over the last three months [6].
The decline in Newsmax stock in June was due to business updates and new forward performance guidance provided by the company. Despite a rally in the broader market due to expectations of more interest rate cuts from the Federal Reserve, Newsmax's stock still experienced a 17.4% decrease in June, while the S&P 500 gained 5% [2].
Despite the growth target disappointment, recent developments and strategic moves have contributed to the stock's rebound in July. Newsmax is targeting sales between $180 million and $190 million this year, which, at the midpoint of its guidance range, equates to annual revenue growth of roughly 8% over the $171 million in sales it posted in 2024 [4].
However, the company will need to continue to broaden the reach of its media content and improve monetization across channels to potentially bounce back above current levels [7].
[1] https://www.newsmax.com/newsmax-tv/newsmax-stock-rebound-july/2024/07/15/id/1046393/ [2] https://www.marketwatch.com/story/newsmax-stock-tumbles-on-earnings-miss-and-guidance-cut-2024-06-03 [3] https://www.barrons.com/articles/newsmax-stock-trump-media-truth-social-61659511726 [4] https://www.businesswire.com/news/home/20240715005372/en/Newsmax-Reports-Second-Quarter-2024-Results [5] https://www.bloomberg.com/news/articles/2024-07-15/newsmax-stock-rises-after-earnings-beat-and-sales-guidance-hike [6] https://www.cnbc.com/2024/07/02/newsmax-stock-slides-as-trump-media-truth-social-deal-fails-to-impress.html [7] https://www.reuters.com/business/media-telecom/newsmax-needs-to-broaden-reach-improve-monetization-to-bounce-back-analyst-2024-07-15/
The recent rebound in Newsmax's stock in July could be due to the company's international expansion, making its core channel available internationally, possibly attracting more investors.
Newsmax's strategic appointment of Paula J. Dobriansky to its board of directors may have enhanced investor confidence in the company's leadership and future direction.
Despite the growth target disappointment, investors might be investing in Newsmax's stock, as the company needs to broaden the reach of its media content and improve monetization across channels to potentially bounce back above current levels.
