Conventional media companies launching initial public offerings (IPO) are a rare phenomenon. However, with Republican President Donald Trump embarking on a second term in the White House, one outlet saw an opportune time to publicly list its shares.
About Newsmax
Founded in 1998 by journalist Christopher Ruddy, Newsmax is a media company known for its conservative news coverage across television, digital platforms, and print. Newsmax operates a cable news channel, digital media platforms, and publishes Newsmax Magazine.
Set to trade under the ticker NMAX from March 31, Newsmax is looking to raise $75 million at $10 per share. The company intends to use the proceeds for general and corporate purposes. Interestingly, the company recently raised $225 million through a private placement offering in which more than 8,000 accredited investors participated.
So, should investors buy up shares after the NMAX IPO? Let’s have a closer look at what aids and ails the company.
Financials
A concerning aspect for Newsmax has been its flat revenues over the years. For 2022 and 2023, the company reported revenues of $135.31 million and $135.28 million, respectively. For the six months ended June 30, 2024, Newsmax's revenues stood at $79.8 million. Even if we assume a doubling of revenues from these levels, it would represent yearly growth of just 18%.
Net losses have also been widening, with 2022 and 2023 seeing the company record losses of about $20 million and $42 million. Alarmingly, in just the first six months of 2024, Newsmax’s losses have already exceeded those of 2023 at $55.5 million.
Although the net cash used in operating activities has declined with outflows of $7.3 million in 2022 and $3.8 million in 2023, it has again surged in 2024 to $7.4 million by June 30. Overall, the company’s cash balance at the end of the June 2024 quarter stood at $6.7 million, which was higher than its short-term debt.
Operational Highlights Ahead of the Newsmax IPO
In 2025, a market report from Grand View Research estimated the global broadcasting and cable TV sector to be valued at $356 billion in 2024, with expectations to reach $451 billion by 2030. However, despite this growth, Newsmax’s ability to secure a substantial portion of this market is uncertain. Although the company describes itself as a “significant player in OTT streaming” in its IPO filing, its digital reach of 52 million “regular” viewers is below that of major competitors like Fox Digital (FOX), which attracts 121 million monthly users and CNN Digital with 119 million. Other media brands like CNBC Digital (49 million) and MSNBC (34 million) come in just below. Although these are not perfect comparisons and cover different time frames, the figures show that Newsmax is somewhere in the middle.
Newsmax is attempting to bolster its market position with a strategy focused on enhancing its OTT streaming services by forming new partnerships and producing additional content, along with ramping up its advertising revenues through sponsored content and collaborations with brands. It also seeks to expand its audience base. However, the company’s execution of this strategy will be crucial.
Moreover, Newsmax’s IPO is structured as a Regulation A offering, allowing the company to sell stock directly to the public without the involvement of underwriters. Underwriters typically help assess market demand, set share prices, and guarantee that shares are sold. The absence of underwriters means Newsmax could find it difficult to sell the intended number of shares. This opens the door to the possibility that the IPO may not be fully subscribed.
Given these challenges, including its limited digital reach and the risks associated with the unconventional IPO structure, buying NMAX stock after the Newsmax IPO carries considerable risk.
