The Birth of a Meme Stock: Newsmax Inc. (NMAX) IPO

A stock seemingly built to be memed.

The Town Crier, Auguste-Xavier Leprince, circa 1800s, oil on canvas

To be honest, I’m kind of surprised this didn’t get more attention.

Newsmax Inc. (NASDAQ: NMAX), the parent company of the eponymous cable channel, went public yesterday. By the end of the market close, shares were up 735% yesterday and are up another 65% as of this writing.

If a comapny’s stock IPOs and the stock increases 735%, then either some investment bankers did something spectacularly wrong and would be the first story in the Money Stuff newsletter, or we have found out next meme stock (which, coincidentally, would also likely be the next story in the Money Stuff newsletter).

I saw that Newsmax was going public this week, but the raise was quite small. Also, discussing a cable news channel with a definite political lean would likely be touching a financial media hot stove. I would likely alienate 30% of the audience who are fervent Newsmax viewers and alienate another 30% who are mad I’m discussing it at all.

But a 735% gain (and rising) leading to a $10 billion-plus valuation for a political news media company that hasn’t generated profit since its founding in 1998 simply had too much meat on the bone to ignore.

The Newsmax IPO has investing lessons abound: Weird & unappetizing corporate structures, investing biases, and designing a stock customer built for meme stock status.

Let’s dig in.

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