Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
Chris Ruddy, a rightwing media mogul and longtime friend of Donald Trump, has become a multibillionaire after Newsmax shares continued to surge following its public listing debut on Monday — an unlikely outcome for a lossmaking cable television channel.
Shares in Ruddy’s Newsmax were up more than 70 per cent on Tuesday morning, after closing more than 700 per cent higher on its NYSE debut on Monday, in an echo of the “meme stock mania” that gripped US equities markets in 2021.
The conservative TV company, which Ruddy founded in 1998, had a market capitalisation of more than $12bn on Tuesday — despite regulatory filings showing Newsmax lost $72mn on $171mn in revenue last year.
Ruddy, a former New York Post journalist and a frequenter of Trump’s Mar-a-Lago golf resort, owns 39.2mn class A shares in Newsmax, valuing his stock at $5.6bn on Tuesday morning. The company raised $75mn in its regulation A+ offering — which comes with lower regulatory burdens than a traditional initial public offering — as well as $225mn in a private preferred offering that closed in February.
Newsmax has been promoting the public listing on-air to its viewers, posting chyrons urging them to “Be an Owner of NEWSMAX!” In an editorial published on the company’s website last July, Ruddy told readers: “We hope hundreds of thousands of Americans like you will be co-owners of Newsmax”, directing them to buy shares through “NewsmaxInvest.com”.
Ruddy wrote: “Newsmax is rising because Americans like you are tired of incredible media bias, now reaching a dangerous level.”
The Newsmax listing provided a windfall to investors including billionaire Republican donor Thomas Peterffy, who like Ruddy lives in Palm Beach, Florida, near Mar-a-Lago.
The unlikely enthusiasm for a company that makes most of its money from cable TV, a business in long-term decline, prompted concern from Peterffy.
He told the Financial Times he was “stunned” by Newsmax’s soaring share price. “I think Newsmax is a great company and is going to have a very bright future, but I think that it does not warrant this high price,” Peterffy said, as the stock was falling from about $190 a share. The company listed its shares at a price of $10.
Peterffy owns more than 23mn Newsmax class B shares. “I saw that there would be a great need for another — next to Fox News — there would be a great demand for an additional, somewhat different conservative channel,” Peterffy said.
Other investors standing to make large windfalls include Sheikh Sultan bin Jassim al-Thani, a member of the Qatari royal family, who was the gas-rich emirate’s deputy prime minister. Al-Thani owns nearly 20mn shares worth nearly $3bn, according to securities filings.
Newsmax, like Fox News, was sued by voting technology companies Dominion and Smartmatic for their alleged involvement in spreading election denialism in 2020. Newsmax last year settled with Smartmatic, agreeing to pay $40mn. However Dominion’s lawsuit is set to begin a jury trial later this year. Newsmax denies any wrongdoing.
In March, the company added Alex Acosta, the former labour secretary during Trump’s first term, to its board of directors. Acosta resigned from his post in 2019 after the Miami Herald revealed he had cut a sweetheart deal with the late disgraced financier Jeffrey Epstein while acting as a US attorney in Florida.
Some hedge funds have begun betting against Newsmax, paying a high rate of interest to borrow its stock in anticipation its shares will quickly fall. One hedge fund told the FT it believed the stock will decline in the coming days as the retail investors who participated in the listing will seek to lock in large profits.
Asked if he would sell his shares in six months, Peterffy said he was not sure. “One never decides an investment move up until the time comes.”
Newsmax’s strong debut comes as several much larger groups have endured disappointing starts as public companies in recent weeks, weighed down by broader concerns about slowing US economic growth.
Newsmax on Tuesday was valued at roughly half of Fox Corp’s $24bn market capitalisation — even though Fox made $14bn in revenue in fiscal 2024, compared to just $171mn for Newsmax.
Ruddy did not immediately respond to requests for comment.
