Newsmax Inc. Shares Plunge 30.89% Amid Valuation Concerns

Newsmax Inc. shares plunged 30.89% in pre-market trading on April 2, 2025, following a meteoric rise since its recent IPO. The conservative television network's stock has been a subject of intense speculation and debate among investors and analysts.

Newsmax's IPO has been compared to the GameStop meme stock mania, with shares surging over 1,200% in just two days. However, experts have raised concerns about the stock's valuation, which they believe is drastically overpriced given the company's current financials and growth prospects. The stock's market cap of $17.18 billion is seen as unsustainable, trading at 162 times last year's revenue despite strong revenue growth and no debt.

Analysts have warned that Newsmax's stock surge is driven by a limited float and meme stock dynamics, rather than fundamentals. The company's $22 billion market cap is unjustifiable compared to Fox Corp, given its lower revenue and viewer numbers. The stock's volatility has led to multiple trading halts, further fueling concerns about its sustainability.

Despite the concerns, Newsmax's CEO Chris Ruddy has maintained that the company has a conservative and independent news mission. However, the stock's recent plunge suggests that investors may be re-evaluating their positions in light of the company's fundamentals and the broader market trends.