For months, Newsmax has been hyping its planned initial public stock offering to raise millions of dollars to fund the business. Earlier this month, it closed its initial private offering, with a press release announcing that it “exceeded its initial target of $150 million … with gross proceeds of $225 million, before the deduction of placement agent fees and other offering expenses.” This was followed by a March 11 press release announcing the official launch of the IPO with the goal of raising an additional $75 million. A March 11 article by Sandy Fitzgerald summarized all this:
The Securities and Exchange Commission has qualified Newsmax to go public and complete its IPO, said Mark Elenowitz, managing director for Digital Offering LLC.
Digital Offering is handling Newsmax’s IPO with an expected listing on the New York Stock Exchange on March 31, 2025.
“This is so exciting,” Elenowitz told Newsmax host Rob Schmitt on “Rob Schmitt Tonight” Monday.
“We’ve been talking about this now since June,” he said. “The company filed in September with the SEC to be a publicly traded company, and on Friday, we got final OK.”
Elenowitz noted that Newsmax’s pre-IPO Preferred Offering had an initial target of $150 million, but the company far exceeded that, raising total proceeds of $225 million.
More than 8,000 accredited investors participated in the Preferred Offering.
That was joined by more hype:
People buying shares now and during the pre-IPO can trade them when Newsmax goes public, which is slated for March 31, Elenowitz added.
Elenowitz told Schmitt that it’s a “fair statement” to say that media companies do well even when times are tough on the market.
“What’s unique about Newsmax is this is their debut,” he said. “This is the first time they’re coming out onto the public marketplace.”
Newsmax, Elenowitz added, has been going through some “pretty significant growth” after having been around for more than 24 years.
“Nielsen ratings are going up with the expansion with YouTube TV and other distribution points,” he said.
“Newsmax is really now getting to the point where mainstream America, not just the conservatives, are starting to really recognize what you’re doing,” he said.
Fitzgerald did remind people there is some risk involved in buying Newsmax stock:
Elenowitz told Schmitt that potential investors should read the offering statement, which will “tell you everything about the offering and the company.”
“I really encourage you to look at the risk factors. And then there’s a section called FAQs, and when you decide it’s right for you, just hit invest.”
But as Seeking Alpha notes, Newsmax’ IPO is a Regulation A offer, which allows sales of stock to the public without there being a registered offer: “I expect a lot of however much buying does happen to be happening for political reasons and that isn’t, to my mind, the way to invest. The offer is being marketed to the viewer and reader base, that’s where the demand is likely to come from.” It added:
Yes, sure, we all know it’s necessary to invest to grow and so on. And yet, we’re not, in fact, seeing much growth there. I think the issue is that advertising prices are falling and doing so equal – or about so – to whatever change there is in viewers and readership. Running to stand still, as it were. Which does make some sort of sense, many media organisations are seeing topline revenue fall drastically for that same advertising price reason. Even mere maintenance can be seen as a good result from that standpoint.
So, the stock is a bit of an iffy proposition, seemingly designed more to line the pockets of Christopher Ruddy and other company officials than to pay off for shareholders. And, of course, Newsmax doesn’t really want to talk about how the lawsuits filed against it for flawed reporting might affect company operations.