Is Newsmax the Next Trump Stock? Unpacking the MAGA Trade.

Summary

NMAX made a wild debut in the stock market skyrocketing +735% on its first trading day. By Tuesday, shares soared another +180% to $233, marking an incredible 2,230% gain from its IPO price of $10.

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📚 Deep Dive 📚

Newsmax NMAX a cable TV and social media company known for its conservative stance, made a wild debut in the stock market skyrocketing +735% on its first trading day. By Tuesday, shares soared another +180% to $233, marking an incredible 2,230% gain from its IPO price of $10.

Trading was definitely a wild ride with Newsmax shares being halted seven times on Tuesday due to extreme volatility, mirroring multiple halts from the previous session.

nmax chart.png

“This is the kind of momentum-driven trade we’ve seen since the meme stock craze began,” said JJ Kinahan, CEO of IG North America, which owns the tastytrade brokerage. “There’s a segment of investors willing to take speculative bets to ride the wave with Newsmax.”

Fundamental Twist: Is Newsmax a Sustainable Investment?

While Newsmax has multiple revenue streams and saw a 26% increase in revenue in 2024, the company remains unprofitable, reporting a net loss of $72 million—a 73% deeper loss than the prior year. The company also burned tons of cash, using $48.7 million for operations and $58.4 million for investments, raising some concerns about its financial stability.

Here is a look at their numbers:

Total Revenue (2024): $171 million (+26% YoY)
Advertising: $109.2 million (+2%)
Subscriptions: $26.9 million (+50%)
Affiliate Fees: $26.7 million (+1,000%+)
Other Revenue: $2.3 million (+125%)
Product Sales: $6 million (-7%)
Net Loss: $72 million (+73% YoY)
Cash Used in Operations: $48.7 million
Cash Used in Investments: $58.4 million

Despite strong revenue growth, the company’s worsening losses and high cash burn could pose risks for investors.

Traders and speculators will likely fuel the frenzy around it for the foreseeable future, linking it to the latest Trump Trade and igniting discussions across trading forums.

There will surely be some fun out there but as for me? I'll stay away from buying shares for now. Stay frosty!

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