Newsmax takes a breather after wild 2,550% rally vaults it to meme stock status

Newsmax loses money, and competes with an array of right-leaning media outlets, including heavyweight Fox News. For the moment, though, investors are incredibly bullish. 

The volatility in Newsmax stock continues on its third day of trading.

The move: After a two-day rally of as much as 2,550%, the stock took a breather, declining by about 24% in Wednesday’s pre-market trading session.

After hitting an intraday high of $265 on Tuesday, the stock traded at $179 on Wednesday. Newsmax priced its IPO at $10 per share on Monday.

Why: The trading activity in Newsmax is reminiscent of other meme-stocks that caught fire with retail investors.

The conservative news channel saw a flood of trading activity immediately after it went public. The stock’s opening trade at nearly $15 represented an immediate 50% gain.

What it means: The explosion in Newsmax stock is reminiscent of Trump Media and Technology Group’s wild stock-market ride since going public via SPAC in March 2024. Both companies are losing money, with Newsmax posting a loss of $72.2 million in 2024 after a loss of $41.8 million in 2023. Annual revenue grew from $135.3 million in 2023 to $171 million in 2024.

Also, similar to DJT, which trades heavily on retail investor sentiment, individual investors have piled into Newsmax shares. The high demand and relatively low supply of stock available to trade have helped push the stock price up massively in two days since the IPO.

“Given that it’s got a small float, I think that makes it susceptible to these big moves and has that meme stock characteristic,” Paul Hickey, co-founder of Bespoke Investment Group, told B-17 on Tuesday.

The trading activity also confuses other market experts.

“I wish I could offer some clarity here, but I can’t,” Steve Sosnick, chief market strategist at Interactive Brokers, said in a note to clients on Tuesday.