Newsmax Stock Falls 94%, Serve Robotics Offers a Brighter Future

Newsmax's stock plummeted 94% to $14 despite its association with President Donald Trump and rapid gain post-IPO. The company faces legal costs and criticism for spreading conspiracy theories. Instead, autonomous delivery robot maker Serve Robotics has a brighter future with its newest Gen 3 delivery robots, which can travel up to 11 mph and carry up to 15 gallons of cargo. Serve has deployed 350 robots and generated less than $2 million in revenue in 2024.

Newsmax's (NYSE: NMAX) stock has experienced a dramatic decline, falling 94% to $14 since its post-IPO spike. The company, which promotes itself as an alternative to mainstream media outlets, went public at $10 on March 31, 2023, and reached a record high of $233 a share the following day. This surge was driven by its association with President Donald Trump, its decision to offer just 6% of its shares in its IPO, and the same meme stock dynamics that temporarily lifted many other Trump-related stocks.

However, Newsmax faces significant challenges. Its cable, satellite, and digital channels reach about 40 million Americans, but it has been criticized for spreading conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.S. Capitol, and COVID-19 vaccines. These claims have triggered big defamation lawsuits from voting machine companies Smartmatic and Dominion. Newsmax reached a $40 million settlement with Smartmatic last year, but the Dominion lawsuit remains unresolved. In 2024, Newsmax's revenue rose 27% to $171 million, but its net loss widened from $42 million to $72 million. This steep loss was caused by the expansion of its platform to support its rising viewership numbers and its legal costs related to the Smartmatic settlement. If Dominion wins its case, Newsmax's valuation could shrink significantly.

In contrast, Serve Robotics (NASDAQ: SERV), an autonomous delivery robot maker, has a brighter future. Serve was spun off from Uber Technologies in 2021 and has deployed 350 delivery robots so far. Its newest Gen 3 robots can travel up to 11 mph, last up to 48 miles on a single charge, and carry up to 15 gallons of cargo. Serve's top customer is still Uber Eats, and it only operates its robots in the Los Angeles and Dallas areas. By the end of 2025, Serve aims to deploy another 2,000 delivery robots for Uber Eats, and over the following two years, it expects to deploy even more robots, expand to more cities, and gain more customers.

If Serve achieves this ambitious expansion plan, analysts expect its revenue to surge to $84 million with a net loss of $44 million in 2027. Based on this outlook, Serve looks reasonably valued at 7 times its 2027 sales. The global delivery robots market is projected to grow at a compound annual growth rate (CAGR) of 32.4% from 2025 to 2030 [2]. Assuming Serve matches analysts' expectations and trades at a more generous 20 times its forward sales, its market cap could swell to $1.7 billion over the next 12 months and easily eclipse Newsmax's current valuation.

In conclusion, while Newsmax faces significant legal challenges and criticism, Serve Robotics presents a promising alternative with its innovative delivery robots and ambitious expansion plans.

References:
[1] https://www.nasdaq.com/articles/prediction-1-growth-stock-will-be-worth-more-newsmax-1-year-now
[2] https://www.marketreportanalytics.com/reports/autonomous-mobile-robot-for-last-mile-delivery-333205