A June 9 Newsmax article was quite literally a press release about itself, even though it was oddly credited to “Newsmax wires”:
Newsmax Inc. is pleased to announce that it will seek to become a public company later this year or in early 2025 with a listing on Nasdaq or the NYSE.
In preparation for this contemplated initial public offering, Newsmax is launching a private placement offering seeking to raise up to $225 million.
“While achieving significant success, Newsmax has stayed true to our mission of providing Americans with honest and real news,” Christopher Ruddy, CEO of Newsmax, said of the company’s plans.
“Now more than ever, especially in this election year of 2024, America needs Newsmax and you can join with us as an investor,” Ruddy said.
For a limited time, eligible investors will be able to invest in this private offering.
Invest now and find more info at NewsmaxInvest.com
The new private offering is solely available to accredited investors.*
That asterisk goes to a note defining an “accredited investor” as someone with a net worth greater than $1 million (excluding their primary residence) or incomes in excess of $200,000 in the last two years with the expectation of the same in the current year (or $300,000 with a spouse).”
The press release also included this claim: “Through its media outlets Newsmax champions a free press, one that provides Americans with balanced coverage, diverse viewpoints, and honest debates on the issues affecting our lives.” That’s a surprise to anyone who has seen its copious Trump rally stenography. There is also a website to promote the IPO plan.
Then the promotion machine kicked in. A June 11 article by Mark Swanson hyped how “The Wall Street Journal was among several major financial media outlets to report on Newsmax’s announcement that it plans to go public later this year,” though he also noted that Axios reported that “The public markets are brutal for media companies right now, but Newsmax is betting it can buck that trend by leaning into the retail investor interest surrounding Donald Trump’s firm.” Swanson didn’t mention that Axios also pointed out that Newsmax has not disclosed whether it is profitable and noted that it “faces two large defamation lawsuits from voting tech companies Dominion Voting Systems and Smartmatic over its coverage of the 2020 election.”
The head of Newsmax got in on the act in another March 11 article by Swanson:
Newsmax founder and CEO Chris Ruddy joined “The Chris Salcedo Show” on Tuesday to talk about the company’s initial public offering that was announced earlier in the week, calling it “a very positive step.”
“And people, I think, are excited. You know, we’ve had so many people, Chris, through the years that have called us, you’ve probably heard from your fans, people saying, ‘How can I own shares of Newsmax?'” Ruddy told Salcedo. “Now we have this opportunity to do it, and I think it’s going to be a very positive step. We’ll have thousands, if not hundreds of thousands of co-owners of Newsmax around the country.”
Dennis Kneale — previously seen around here whitewashing racism and denying that Islamophobia exists — wrote up an embarrassingly fawning commercial for the IPO, after having Ruddy as a guest on his podcast, in a June 17 column:
Would you buy a preferred stock from this man? Full disclosure up front: I just did.
Chris Ruddy founded Newsmax as a digital media company way back in 1998, and it has survived the internet crash, the Great Meltdown of 2008, and the Obama era, launching as a cable channel in 2014.
Since the 2020 election, Newsmax has grown faster than any other major cable news channel, in part by luring new viewers who felt Fox News had betrayed President Trump.
[…]Newsmax could become a media meme stock for conservative investors, although Ruddy hopes otherwise, as he tells me on my podcast, “What’s Bugging Me.”
“I hope it’s a true financial investment play. I wouldn’t want people to invest just on emotion, even though they might feel good about us,” he says.
“Our revenues are up over 300% since 2019.”
He attributes this to “the public voting in favor of media like Newsmax that is not just the drivel they’re getting from the Big Media.”
[…]He looked at the value that Wall Street has bestowed on Trump Media: $6.5 billion currently, despite revenue of just $4 million last year and a loss of $53 million.
The private stock offering for Newsmax, with revenue more than 30 times as large, would value the company at $1.5 billion to $1.8 billion, which sounds like it might leave room for growth.
“We’re not endorsed by Trump per se as a business, although he likes the network, and he’s spoken in praise of it,” Chris Ruddy says.
“So, I think that, you know, maybe some of the charm will rub off.”
A June 20 article, credited only to “Newsmax Wires,” didn’t mention the IPO except in a tagline at the end, but it designed to promote the company’s prospects:
A new Reuters study found that Newsmax is one of the influential news brands in the U.S.
Earlier this week, the Reuters Institute for the Study of Journalism released its annual Digital News Report, surveying 100,000 people across 47 countries.
The Reuters U.S. survey found Americans are turning to just 12 news brands offline for news.
And Newsmax was one of them.
The article didn’t mention that Newsmax was toward the bottom of that list and that “local television news,” a “regional or local newspaper” and “local radio news” also ranked above it.
Meanwhile, Mediaite reported what Newsmax won’t about the motivation behind the IPO — it’s driven by a possible expensive settlement in those Dominion and Smartmatic lawsuits:
Sources who spoke with Mediaite described the public offering as an effort to stave off financial ruin as the network faces two potentially fatal defamation lawsuits from election tech companies Smartmatic and Dominion. Both allege Newsmax promoted false claims the election was stolen from Trump in a bid to lure viewers and juice profits. Newsmax has denied those claims.
“It appears Newsmax is trying a Hail Mary pass to secure a financial lifeline with low info investors since legitimate funding sources will likely run from this,” said one Newsmax insider with knowledge of the company’s finances.
In a 225-page disclosure to potential investors, Newsmax stated the company is “currently involved in significant litigation, including claims relating to alleged libel or defamation and personal injury and property damage, free speech, and regulatory requirements.”
On page 72 of the document, Newsmax disclosed that it is being sued by Dominion, which is seeking upwards of $1.6 billion in damages, as well as Smartmatic. Newsmax also revealed in the document that in 2023, the company settled with an unidentified commercial party for $41.3 million, to which it has paid roughly $2 million so far.
Indeed, Newsmax is apparently so cash-strapped that a heavy monetary settlement could destroy the company:
One Newsmax insider who spoke with Mediaite scoffed when asked if the network could stomach a payout anywhere close to what Fox had to pay Dominion. “They can’t even afford a $15 million settlement,” the source said.
“If it’s 20 million or above they probably wouldn’t be able to settle,” estimated another source, who added the network has been operating on a shoe-string budget for the last few years. “They’re on a massively tight budget.”
[…]One Newsmax staffer told Mediaite the IPO “feels incredibly shady amid the mountain of legal trouble Newsmax is facing, in addition to the chaos and incompetency behind the scenes.”
“Staff has heard repeatedly in recent months about the company budget being tight,” they said. “Newsmax scales back on important events and can’t even afford quality equipment in the studios. What the company currently has is outdated and constantly breaking down.”
The staffer also expressed outrage that hosts on the network have been made to promote the IPO on the air.
Mediaite also reported that “The company hasn’t made a profit since 2021, having lost $20 million in 2022 and $41.8 million in 2023,” though a Newsmax spokesperson insisted the company is profitable now and whined that “Mediaite is run by a host from a competitor network.”