Newsmax Stock Plunges 70% After Wild 2-Day Surge

Ladies and gentlemen, buckle up! We're in the middle of a roller coaster ride with Newsmax stock, and it's not for the faint-hearted. After a dizzying two-day surge that saw the stock skyrocket by as much as 2,550%, the conservative cable channel's shares have plummeted more than 70% in Wednesday's pre-market trading session. This is the kind of volatility that makes even the most seasoned investors' heads spin!



Let's break it down. Newsmax, the conservative news channel, went public on Monday with an IPO price of $10 per share. By Tuesday, the stock had hit an intraday high of $265, valuing the company at over $29 billion. That's right, folks—from $10 to $265 in just two days! But then, just as quickly as it rose, the stock crashed, trading at $179 on Wednesday. This is the kind of wild ride that has investors on the edge of their seats, wondering what's next.

So, what's driving this extreme volatility? It's all about retail investor sentiment and the meme stock phenomenon. Newsmax's stock has been heavily influenced by individual investors, much like GameStop and other meme stocks. The high demand and relatively low supply of stock available to trade have pushed the price up massively. But remember, with great gains come great risks. The stock's decline on Wednesday is a stark reminder of that.



Now, let's talk about the broader trends in the IPO market. Newsmax's blockbuster debut is a stark contrast to the struggles of other companies like Nvidia-backed CoreWeave, which finished its first trading day at $40, its exact IPO price, and then slumped in its second session. This shows that while some companies are struggling, others are experiencing extraordinary success due to retail investor sentiment.

But here's the thing: Newsmax is losing money. The company posted a loss of $72.2 million in 2024 after a loss of $41.8 million in 2023. This is similar to Trump Media and Technology Group, which also experienced significant volatility due to retail investor sentiment. So, while the gains are enticing, investors need to be cautious. This is not a company with a strong financial foundation.

So, what should you do? If you're a retail investor, you need to be prepared for the wild ride. This is a meme stock, and it's going to be volatile. But if you're looking for a stable investment, you might want to stay away. This is not a company with a strong financial foundation, and the volatility is a risk that not all investors are willing to take.

In conclusion, Newsmax's stock plunge after a dizzying two-day surge is a reminder of the risks and rewards of investing in meme stocks. The extreme volatility is driven by retail investor sentiment and the meme stock phenomenon, and while the gains can be enticing, investors need to be cautious. This is not a company with a strong financial foundation, and the volatility is a risk that not all investors are willing to take. So, buckle up, folks—it's going to be a wild ride!