Newsmax stock rises after IPO

Shares of conservative cable channel Newsmax soared more than 60% in early trading Tuesday, a day after the stock’s dizzying debut on the New York Stock Exchange.

Newsmax shares spiked more than 700% in their first trading day Monday, closing at $83.51 per share. The stock opened the day at $14 per share.

Traditional media IPOs are hard to come by, especially given the significant changes to the business model, and Newsmax’s meteoric debut was unexpected. The highly anticipated stock debut of CoreWeave on Friday — the biggest tech IPO since 2021 and first pure-play artificial intelligence IPO — has had a tempered start in comparison.

The stock surge in volatile trading put the company at a valuation of more than $10 billion. Founder and CEO Christopher Ruddy, who owns roughly 39.2 million Class A shares of the company and 81.4% of voting stock, joined the billionaire ranks after the initial public offering. As of Tuesday, Ruddy’s stake was worth more than $6 billion.

“We’re going out with a market cap of $1.2 [billion]. But we don’t see ourselves as a value stock. We see ourselves as a growth stock. So those multiples are going to be a lot higher,” Ruddy said Monday on CNBC’s Squawk Box before the stock debuted.

On Tuesday, Newsmax sent out an email to investors highlighting its stock rise on the opening day of trading.

“Americans for a long time have been voting with their remote controls, downloads, apps to say they want Newsmax. Now investors powerfully are buying Newsmax shares because they like us, they value us and they want us to keep growing,” Ruddy said in a statement to CNBC.

The right-wing TV channel has gained traction during President Donald Trump‘s second term, and it’s the fourth most-watched cable news channel after Fox News, MSNBC and CNN, according to Nielsen. Ruddy said on CNBC on Monday that he morphed the company from a digital media outlet to a cable channel in an effort to grab market share from Fox News.

Still, its viewership pales in comparison to the dominant conservative channel Fox.

Between Dec. 30 and March 20, Newsmax had an average of 309,000 primetime viewers and 211,000 daytime viewers, according to Nielsen data. Fox News attracted an average of nearly 3.1 million primetime viewers and roughly 2 million daytime viewers during the same period.

The trading Tuesday continues a stunning rise for the pure-play cable TV stock. Even as news and live sports grab the biggest audiences, the industry has suffered in recent years as consumers flee cable bundles in favor of streaming.

“We hate the bundle. The bundle is terrible for the cable industry. It’s terrible for consumers,” Ruddy said on Monday, referring to the traditional pay TV package of a multitude of channels that once dominated the industry.

But despite remaining profitable and raking in cash for media companies, the bundle has been losing subscribers at a fast clip as consumers opt for cheaper streaming options rather than the notoriously pricy package of channels.

Ruddy pointed to this in his comments, noting that consumers who want access to networks like ESPN — which capture the bulk of viewers, and in turn, higher fees — are still stuck paying for a package of channels they may not want or need.

Newsmax started receiving fees from pay TV distributors in recent years to carry its network after primarily receiving advertising revenue to support the business as it built its audience.

Ruddy said Monday that Newsmax’s fees have been increasing. He added that Newsmax is also available on streaming and has podcasts — offerings that are typical of all media businesses currently.