Newsmax, a newly listed US stock, skyrockets 2,230% in its first 2 days, surpassing Fox News' market cap

Shares of conservative cable news channel Newsmax skyrocketed 179.01% to settle at $233 apiece on the New York Stock Exchange on Tuesday, adding on a 735% surge in its debut session on Monday.

Newsmax raised $75 million from its initial public offering by selling 7.5 million equity shares for $10 apiece. On the first day of trading, the scrip ended at $83.51 per unit. It has surged 2,230% from its IPO price in just a couple of days of trading.

Christopher Ruddy, the founder and CEO of Newsmax, who holds one-third of the company's shares, is worth $9.1 billion as of the current valuation.

The money raised will be used for talent and programming, distribution and digital expansion, marketing, and working capital and capital expenditure requirements.

The media outlet reported a 34.5% increase in its revenue to $79,826,377 for the six months ended June 2024, compared to $59,331,195 in the corresponding period the previous year. However, its losses (before income tax expenses) expanded 42.79% to $55,492,287 during the period under review from $38,827,627 a year back.

Newsmax is facing litigation that can impact its bottom line. According to the regulatory filing, election technology company Dominion Voting Systems Corporation filed a defamation complaint against the news channel in the Superior Court of Delaware in regards to coverage of the 2020 presidential election. The complainant has sought $1.6 billion in compensatory and punitive damages.

"As of the date of this Offering Circular, Newsmax is unable to predict the final outcome of the Dominion matter and cannot reasonably estimate the amount of its liability, if any. However, an unfavorable outcome in the Dominion matter could have a material adverse effect on Newsmax’s financial position, results of operations and cash flows," the company said.