NewsMax (NYSE:NMAX) floated its shares on the New York Stock Exchange (NYSE) this past week. Shareholders saw the value of the equity go hyperbolic as shares closed at $233 yesterday, rising almost $150 during the day, giving the company a market cap of over $20 billion.
In recent months, NewsMax raised $225 million in a Reg D offering available to accredited investors. This was followed by a Reg A+ offering available to non-accredited investors. The Reg A offering sold shares at $10 each, thus delivering an astounding increase in value for investors.
NewsMax was created to challenge Fox as the founder saw an opportunity to compete with the center/center-right news network, which had the category all to itself. Today, NewsMax claims it is just behind CNN in its ratings, and the capital infusion should boost its growth.
Today, in pre-market trading, NewsMax indicates a reversal in its gains of around 20%. As of this writing, shares currently indicate an open of around $183 a share, holding on to most of their gain.
NewsMax’s valuation is even more incredible when you recognize that the company is losing money. According to its Reg A offering circular, it only generated $79,826,377 during the first six months of 2024, losing over $55 million. Still, most early-stage companies lose money as they build out their product or service, and clearly, some investors hold high expectations for the nascent news network.
Update: On Friday, April 4, NewsMax closed at $45.00 giving up much of its impressive gains yet still holding onto a significant gain versus its issuance price. Some have postulated that limited shares helped to push the value of higher. Currently, NewsMax is valued at just over $4 billion.
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