Newsmax, a media company, experienced a significant drop in its stock price, falling 10% on Friday, despite the S&P 500 increasing by 1.8% and the Nasdaq Composite rising by 2%. This decline occurred even though there was seemingly positive news for the company. Newsmax benefited from momentum associated with “meme stocks” following its initial public offering (IPO) on March 31.
The media company’s stock saw a decline despite a notable development involving the renewal of a multiyear program hosting extension with Greta Van Susteren. This contract extension for “The Record With Greta Van Susteren” could be viewed as a positive step, but it was insufficient to maintain the company’s share price. Although Newsmax’s stock initially rose by as much as 13.4% during the trading session, it eventually failed to sustain those gains while the broader market moved upward. Investors likely perceived a decrease in the stock’s meme momentum and decided to sell shares as a result.
Currently, Newsmax has a market capitalization of approximately $2.94 billion, with the company reporting sales of $171 million in the previous year. This positions the company’s valuation at roughly 17.2 times its last year’s revenue. Last year, Newsmax achieved an annual sales increase of approximately 26%, but there is concern that sales growth may slow down this year without the influence of the 2024 elections. Additionally, given the company’s $72 million net loss last year, interest in the stock may remain subdued, even after recent valuation declines.
