In a stunning turn of events, Newsmax’s stock (NMAX) has taken investors on a rollercoaster ride that’s hard to ignore.
After an astronomical surge of 2,550% in just two days post-IPO, the stock plummeted 77% on Wednesday, April 2nd, 2025, closing at $52.71.
The Meteoric Rise
Newsmax, the conservative news channel, entered the public market with an IPO price of $10 per share on Monday, March 31st, 2025.
The stock opened at nearly $15, signaling strong investor enthusiasm.
By Tuesday, April 1st, 2025, shares had skyrocketed to an intraday high of $265, which pushed the company’s market capitalization to nearly $30 billion, exceeding even established media giants like Fox Corp.
The Sudden Fall
However, the euphoria was short-lived.
On Wednesday, April 2nd, 2025, Newsmax’s stock experienced a dramatic downturn, plunging 77% to close at $52.71. This sharp decline wiped out a significant portion of the gains from the previous days.
What’s Behind this Volatility?
Several factors contributed to this extreme volatility:
- The limited number of shares available for trading made the stock susceptible to large price swings.
- Much like other meme stocks, Newsmax attracted a surge of interest from retail investors, which led to rapid price increases followed by steep declines.
- Despite the stock’s initial surge, Newsmax reported a loss of $72.2 million in 2024, up from a $41.8 million loss in 2023, despite revenue growth from $135.3 million to $171 million over the same period.
Should You Be Worried?
Newsmax’s recent stock performance highlights the inherent risks of investing in highly volatile stocks, especially those with characteristics of meme stocks.
While the initial surge may have presented opportunities for quick gains, the subsequent plunge serves as a cautionary tale about the potential for rapid losses.
The Newsmax saga is a stark reminder of the unpredictable nature of the stock market and the importance of informed investing.
As such, investors should always stay updated and consider their risk tolerance before engaging with such volatile assets.
