Why Newsmax Stock Is Getting Crushed Today

Shares of the conservative media outlet Newsmax (NYSE: NMAX) had sunk by nearly 50% as of 1:25 p.m. ET today. There was no obvious reason behind the move but the stock has traded like a meme stock since going public on Monday, so big moves are to be expected.

Meme stocks are volatile

Newsmax, which has the fourth-largest cable news audience in the U.S., made its debut on the New York Stock Exchange on Monday in a small initial public offering (IPO) that raised $75 million and priced shares at $10. The stock then took off, rising as high as $233 per share yesterday before crashing today. Still, the stock is up over 1,000% since it began trading.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Newsmax has long supported President Donald Trump, and it has not been uncommon to see Trump-linked media companies such as Trump Media & Technology Group trade like meme stocks.

"This makes the early run-up in DJT seem like child's play. But both share the characteristic of offering a play on MAGA, and we've seen that sort of enthusiasm take on a life of its own," Interactive Brokers Chief Strategist Steve Sosnick recently told Barron's. Sosnick also noted that the small amount of shares sold (7.5 million) has put fuel on the fire, and that borrowing shares to short is likely too expensive right now.

Trade at your own risk

As I pointed out yesterday, Newsmax makes no sense to buy from a fundamental standpoint, given that the company reported a loss of over $72 million in 2024 and now trades at over an $10 billion market cap. Being a meme stock, it could certainly surge again in the near term, but buying it amounts to a highly speculative and risky gamble.

Should you invest $1,000 in Newsmax right now?

Before you buy stock in Newsmax, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Newsmax wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $675,119!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 1, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.