There’s a new Trump trade on Wall Street, and it’s as volatile as the president’s agenda.
Conservative media outlet Newsmax, long aligned with President Donald Trump, made a dramatic public market debut Monday with its shares surging as much as 2,200 percent—earning it instant “meme stock” status and marking the latest jolt to the media landscape just 70 days into Trump’s return to office.
Why It Matters
The Trump administration has upended traditional media relations, from reshuffling the White House press pool and Pentagon press offices to fighting the Associated Press in court over the wire service’s refusal to use the “Gulf of America” terminology favored by the White House.
Former President Donald Trump fist bumps Newsmax host Eric Bolling as he speaks to members of the media at Mar-a-lago on Election Day, Tuesday, Nov. 8, 2022, in Palm Beach, Florida. Former President Donald Trump fist bumps Newsmax host Eric Bolling as he speaks to members of the media at Mar-a-lago on Election Day, Tuesday, Nov. 8, 2022, in Palm Beach, Florida. AP Photo/Andrew Harnik)
Trump has frequently labeled unfavorable coverage as “fake news” and has been a vocal critic and champion of specific media outlets. He most often praises Newsmax and Fox News, outlets that frequently align with his messaging and share close ties to the commander-in-chief.
Trump, a Wharton graduate who plays up his businessman brand, has backed numerous ventures and started his own spanning various industries, from hospitality to news media to entertainment.
The president and one of his closest allies, billionaire Elon Musk, each have majority control of leading social media platforms—Truth Social and X, formerly Twitter, respectively—both of which play influential roles in shaping public discourse and circulating information. Trump also has a long-standing relationship with Newsmax CEO Christopher Ruddy, who became a billionaire on paper this week after Newsmax’s explosive IPO.
What To Know
Newsmax went public on Monday with shares priced at $10. By Tuesday afternoon, the stock — trading under the ticker NMAX on the New York Stock Exchange — had skyrocketed to $233, valuing the outlet at more than $20 billion. That would give Newsmax a market capitalization just shy of Warner Bros. Discovery, the media conglomerate that owns CNN.
Shares then plummeted by 40 percent on Wednesday morning, and were trading around $125 by midday—still some 12 times the IPO price.
The wild fluctuations in Newsmax shares have drawn comparisons to the pandemic-era “meme stock” craze, given that the company is unprofitable, having lost $72 million last year, according to regulatory filings. While revenue had also increased 26 percent from the year prior, the sky-high valuation — coming as the rest of the market is in the midst of tariff-related doldrums — suggests Newsmax is being traded on something other than its fundamentals.
Newsmax correspondent Jon Glasgow reports from Trump National Golf Club Bedminster on Tuesday, June 13, 2023, in Bedminster, New Jersey. Newsmax correspondent Jon Glasgow reports from Trump National Golf Club Bedminster on Tuesday, June 13, 2023, in Bedminster, New Jersey. AP Photo/Ted Shaffrey)
“Meme stocks” are shares that experience dramatic price increases driven more by online buzz than by traditional indicators like company performance or product value. The prime example is GameStop, which soared in January 2021 after a Reddit-fueled frenzy.
Just two days after Newsmax’s explosive IPO, Trump’s own social media company, Truth Social, filed with the U.S. Securities and Exchange Commission to release nearly 115 million shares of stock held by a trust overseen by the president, valued at approximately $2.3 billion. The filing hints that Trump’s majority-owned media company, which went public last March and has also been deemed a “meme stock,” is trying to capitalize on the momentum of Newsmax’s stock market debut.
Nik Usher, an associate professor at the University of San Diego’s communications department, told Newsweek in an email that Newsmax’s IPO reflects the “Trump bump” in the conservative media ecosystem.
Usher said Newsmax’s successful IPO shows that conservatives “have a market need for more than just one single omnipresent and dominant voice, Fox,” while also noting that “it will add more depth to the news ecosystem, but whether that benefits the cause of civil discourse or stirs more rancor, time will tell.”
Who Is Christopher Ruddy?
Ruddy founded Newsmax in 1998, after journalism stints at the New York Post and the Pittsburgh Tribune-Review. Ruddy’s outlet expanded into television with the launch of its own channel in 2014.
Newsmax CEO Chris Ruddy speaks during a dinner meeting with President Donald Trump and other business leaders on Aug. 7, 2018, at Trump National Golf Club in Bedminster, N.J. Newsmax CEO Chris Ruddy speaks during a dinner meeting with President Donald Trump and other business leaders on Aug. 7, 2018, at Trump National Golf Club in Bedminster, N.J. AP FILE
In recent years, traditional TV news channels have seen a significant decline in viewership, forcing many legacy networks to slash programming and staff—CNN, for instance, laid off approximately 200 employees working on television programming in January. MSNBC has also been making cuts in preparation for its parent company, Comcast, to spin it off along with a handful of other underperforming cable networks in its portfolio.
“What is most interesting — and telling — about this moment is that the investment is in television. And not just television but one outlet, a logic that flies in the face of everything we know about how media and technology are changing how people access and consume news,” Usher said.
Seeing a decline in traditional viewership, TV news outlets have shifted their energies to developing more digital offerings such as newsletters and separate streaming platforms. For its part, Newsmax was early to the streaming revolution, having launched with a free streaming model 11 years ago.
In a July editorial, Ruddy credited Newsmax’s popularity due to its “honest” reporting, writing: “Newsmax is rising because Americans like you are tired of incredible media bias, now reaching a dangerous level. Americans want new media and honest media.”
Some might quibble with that reputation for honest reporting. Earlier this month, Newsmax agreed to pay $40 million to end a 2020 election-related defamation lawsuit with voting technology company Smartmatic. The suit came after Newsmax falsely accused the company of rigging the 2020 election against Trump. There is no evidence of widespread voter fraud of machine error in the 2020 election, which President Joe Biden won.
Newsmax is also involved in ongoing litigation with Dominion Voting Systems, which is seeking $1.6 billion in damages related to those same false claims. Dominion settled a similar suit with Fox for a staggering $787 million in 2023.
Ruddy’s success with Newsmax is due in part to his nearly 30-year personal relationship with Trump, bolstered by his longtime membership at Mar-a-Lago. He has served at times as a mouthpiece for Trump and an informal advisor to the president during his first term.
Close allies of Trump also maintain strong ties to Newsmax, notably Richard Grenell, who is rumored to be in the running for U.S. ambassador to the United Nations. On the day of the IPO, Grenell took to X to praise his longtime friend Ruddy, highlighting his personal history with the outlet: “Huge congratulations to the entire team but especially to my friend of more than 25 years, Chris Ruddy. Ruddy was relentless in getting @NEWSMAX to this moment. I served on the board when it was just a magazine then a website then a TV station. Huge day today for the Newsmax family.”
What Happens Next
Newsmax has said it plans to plow its increased capital from the IPO into expanded programming and digital offerings, hoping to grow its audience. The network is already the fourth most-watched cable news channel in the U.S., behind Fox, MSNBC and CNN.
The company also noted the Dominion lawsuit as one of its risk factors going forward.
