Newsmax (NMAX) shares have risen more than 1,500% since the conservative cable channel's Monday debut on the New York Stock Exchange, when it opened at $14 per share.
Launched in 2014, the right-wing cable network has grown in popularity during United States President Donald Trump’s second term to become the fourth most-watched cable news channel after Fox News, MSNBC and CNN, according to Nielsen.
The unexpected skyrocketing of Newsmax stock – up 700% on day one alone - puts the company’s market cap at around US$30 billion. This exceeds the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp.
However, viewership pales in comparison to the dominant conservative channel Fox.
Commenting on the company’s first day of trading, Newsmax founder and CEO Christopher Ruddy said Americans for a long time have been voting with their remote controls, downloads, and apps to say they want Newsmax.
Lurch to the right
“Now investors powerfully are buying Newsmax shares because they like us, they value us and they want us to keep growing,” said Ruddy who has 39.2 million Class A shares worth more than US$9 billion.
“We believe we’re conservative with an independent news mission, and we ask tough questions of the Trump administration,” added Ruddy who counts Republican and Democratic lawmakers as both contributors and viewers.
According to Jonathan Miller, a former executive at News Corp, the phenomenal support for Newsmax shows there continues to be financial support for all things MAGA.
“There is room for a multiplicity of voices on the right in a way we haven’t seen emerge on the left,” said Miller who currently serves as CEO of Integrated Media, which specialises in digital media investments.
It’s understood that Ruddy along with Interactive Brokers founder Thomas Peterffy - Newsmax’s second-largest shareholder - invested $50 million in Newsmax in 2019.
Bundle v cable
Newsmax transitioned from a digital media outlet to a cable channel on the pretext it could grab market share from Fox News.
Underlying support for Newsmax also belies the shift away from cable bundles in favour of streaming with news and live sports attracting the biggest audiences.
“We hate the bundle. The bundle is terrible for the cable industry. It’s terrible for consumers,” Ruddy said, referring to the traditional pay TV packages that require viewers to pay for a package of channels they may not want or need.
Nielsen data shows between 30 December and 20 March, Newsmax had an average of 309,000 prime-time viewers and 211,000 daytime viewers. In contrast, Fox News attracted almost 3.1 million prime-time viewers and roughly two million daytime viewers during the same period.
