A NEWSMAX television crew member steam irons a backdrop during the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, on Saturday, February 24, 2024.
Tom Brenner | The Washington Post | The Washington Post | Getty Images
Shares of conservative cable channel Newsmax soared nearly 180% Tuesday, a day after the stock’s dizzying debut on the New York Stock Exchange.
Newsmax shares have risen more than 1,500% since its Monday debut, when it opened at $14 per share. It closed at $233 per share on Tuesday.
The skyrocketing stock not only brought the company’s market capitalization to nearly $30 billion â surpassing the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp â it also propped up the returns of its investors.
Traditional media IPOs are hard to come by, especially given the significant changes to companies’ business models in recent years, and Newsmax’s meteoric debut was unexpected. The highly anticipated stock debut of CoreWeave on Friday â the biggest tech IPO since 2021 and first pure-play artificial intelligence offering â saw a tempered start in comparison.
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 the market close, Ruddy’s stake was worth more than $9 billion.
Interactive Brokers founder and billionaire Thomas Peterffy is Newsmax’s second-largest shareholder with 23 million shares â worth more than $5 billion as of Tuesday â owned through a limited-liability company, Conyers Investments.
Peterffy invested $50 million in Newsmax in 2019, according to an individual familiar with the deal. He declined to comment on his investment to CNBC. Peterffy has appeared on Newsmax before and is a prominent GOP donor.
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.
Rising red tide
Fox News and Newsmax television studios are seen in the Fiserv Forum on the day before the Republican National Convention begins, in Milwaukee, Wisconsin, July 14, 2024.
Joe Raedle | Getty Images News | Getty Images
Newsmax, which launched its right-wing cable network in 2014, has gained traction during President Donald Trump’s second term and is the fourth most-watched cable news channel after Fox News, MSNBC and CNN, according to Nielsen.
Ruddy said on Monday that Newsmax counts Republican and Democratic lawmakers as both contributors and viewers. “We believe we’re conservative with an independent news mission, and we ask tough questions of the Trump administration.”
Last week, Ruddy posted on X that he received a call from Trump, adding “I shared with Potus my new saying: ‘A rising Trump lifts all boats!'”
“This shows there continues to be financial support for all things MAGA. There is room for a multiplicity of voices on the right in a way we haven’t seen emerge on the left,” said Jonathan Miller, a former senior News Corp. executive who currently serves as CEO of Integrated Media, which specializes in digital media investments.
Newsmax transitioned from a digital media outlet to a cable channel because Ruddy saw an opportunity to grab market share from Fox News, he told CNBC’s “Squawk Box” on Monday.
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 prime-time viewers and 211,000 daytime viewers, according to Nielsen data. Fox News attracted an average of nearly 3.1 million prime-time viewers and roughly 2 million daytime viewers during the same period.
The trading Tuesday continued 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 Monday, referring to the traditional pay TV package of a multitude of channels that once dominated the industry.
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 pricey package of channels.
Ruddy pointed to this in his comments, noting that consumers who want access to networks like ESPN â which capture the bulk of viewers, and in turn, higher fees â 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 â offerings that are typical of all media businesses currently.
â CNBC’s Hayley Cuccinello contributed to this article.
Disclosure: NBCUniversal is the parent company of MSNBC and CNBC.