- Newsmax stock plunged 68% after a massive two-day rally pushed shares as high as $233.
- The company posted a $72M loss in 2024 and admitted to material weaknesses in its financial controls.
- Newsmax is facing a $1.6B lawsuit from Dominion and recently settled with Smartmatic for $40M.
After two days of jaw-dropping gains, Newsmax (NMAX) stock fell hard on Wednesday afternoon, dropping nearly 68% and cutting deep into the eye-popping rally that had taken it from $14 to over $230 in just a matter of days.
By 2:15 p.m. ET, shares were trading around $75, wiping out a hefty chunk of market cap. The company’s valuation now sits around $6.7 billion, down from a peak of more than $20 billion just 24 hours earlier. Yeah… that’s not nothing.
From Meme Stock Euphoria to Hard Reality
The conservative media outlet—seen by many as a Fox News alternative and a staple in the pro-Trump media ecosystem—has been on a wild ride since its $10 IPO last week. On Monday, shares exploded 735%, followed by another 180% gain Tuesday. The entire thing has drawn comparisons to GameStop-era meme stocks and the Trump Media (DJT) hype.
But today? The brakes hit hard.
“It’s got meme vibes written all over it,” one market analyst told Bloomberg. “Only this time, it’s wrapped in red, white, and blue.”
Financials Don’t Lie
And here’s the kicker: Newsmax is losing money.
According to its latest SEC filing, the company brought in $171 million in revenue last year—a solid jump from $135 million the year prior. But… losses also swelled nearly 73%, from $41 million to $72 million. Oof.
Even more concerning? Newsmax admitted to “material weaknesses” in its financial reporting controls, warning there’s a risk of material misstatements it may not catch “on a timely basis.” Translation: accounting’s a bit messy.
Lawsuits Still Lurking
Then there’s the legal stuff. Dominion Voting Systems is still suing Newsmax for $1.6 billion over false election claims aired in 2020—claims Newsmax flagged as a risk to investors in its 10-K. They also recently settled with Smartmatic for similar allegations, paying out $20 million so far of a $40 million agreement.
Market Hype Meets Cold Math
At Tuesday’s close, Newsmax had a larger market cap than both News Corp (the Wall Street Journal’s parent company) and Super Micro Computer, the AI server powerhouse. Let that sink in.
By Wednesday, the air was already seeping out of the balloon. And while some investors still see “Trump-aligned” media as a growth space, others are wondering if the stock got a little too hot, a little too fast.
“The Trump trade is alive,” said one trader on X, “but it’s also volatile as hell.”
