The introduction of Newsmax to Wall Street was met with a buying frenzy during its first two days as a publicly-traded company, but the hype appears to be largely over, with its stock price losing 83 percent of its valuation from its mid-week peak.
No foolin’ — Newsmax achieved an all-time high of $283 per share by the midday trading on April 1, only to begin its steep slide toward a more-reasonable $43 per share when the market opened on Thursday.
Investors had characterized Newsmax’s volatile trading immediately after its initial public offering as the latest “meme stock,” with financial and media analysts alike strongly suggesting that the cable network’s stock price was wildly overvalued, given its balance sheet.
Newsmax is one of the few pure-play television companies on the market, with its core products consisting of its namesake cable news network and associated website, streaming service Newsmax Plus and free, ad-supported streaming TV channel Newsmax 2.
At $43, the company’s per-share price is still higher than other broadcasters like the E. W. Scripps Company ($2.60 per share) and Sinclair, Inc. ($15 per share), but is below that of Nexstar Media Group ($171 per share) and Fox Corporation ($54.20 per share).
Among diversified media companies, Newsmax is outperforming Warner Bros Discovery ($9.70 per share), Comcast ($36 per share) and Paramount Global ($11.60 per share). Each of those three companies also has film studios and theme parks as part of their respective businesses, while Newsmax does not.
While some investors may be disappointed that the Newsmax meme stock craze is largely over, those who got “in” on the action when Newsmax priced its initial offering at $10 per share have still quadrupled their holding since Monday.
