Leo Sun, The Motley Fool

Sun, Jun 22, 2025, 4:15 AM6 min read

• Newsmax’s stock plummeted from its post-IPO highs.

• Unresolved lawsuits, rising costs, and clashes over carriage fees could curb its growth.

• It could struggle to outperform the S&P 500 and higher-growth media stocks.

• 10 stocks we like better than Newsmax ›

Newsmax (NYSE: NMAX) executed one of a wildest IPOs of 2025. The conservative media company went public at $10 on March 31, but it closed at $83.51 on its first day and nearly tripled to a record closing price of $233 per share the next day. That rally was driven by the company's association with President Donald Trump, its limited supply (it only offered 6% of its shares in its IPO), and the same meme stock dynamics that lifted other Trump-related stocks.

At its peak, Newsmax's market cap swelled to $29 billion, or 170 times the $171 million in revenue it generated in 2024. But today, Newsmax's stock trades at about $13 with a market cap of $1.7 billion, which still isn't a bargain at 10 times last year's sales.

Newsmax's meme stock valuations were clearly unsustainable, and its steep losses, messy legal battles, and ongoing dilution indicated it wasn't a great long-term investment. But can it stabilize its business over the next three years?

Newsmax was founded in 1998. It was originally an online and print media company before it launched its linear TV platform, Newsmax TV, for satellite and cable networks in 2014. Over the following decade, Newsmax flourished as a conservative alternative to mainstream media networks like Fox News.

Its growth accelerated under the first and second Trump administrations, but it was also criticized for disseminating conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.S. Capitol, and COVID-19 vaccines. Newsmax's controversial claims about the 2020 elections sparked defamation lawsuits from the voting system suppliers Smartmatic and Dominion. Newsmax agreed to pay a $40 million settlement to Smartmatic last year, but it hasn't reached a settlement with Dominion.

Its payments to Smartmatic -- along with the costs of expanding its infrastructure to support its higher viewership rates up to the election -- caused its net loss to widen significantly in 2024. Newsmax's higher viewership rates boosted its advertising, cable licensing, and subscription revenues in 2024, but its higher expenses offset those gains.

Data source: Newsmax.