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(Bloomberg) -- Newsmax Inc. shares skyrocketed 735% in their debut session after the conservative media outlet’s initial public offering, with individual investors helping hand the firm the best first-day performance since 2022.
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The stock closed at $83.51 each on Monday, in a first trading day as a public company that saw shares repeatedly halted for volatility. Newsmax raised $75 million in the offering, selling 7.5 million shares for $10 apiece.
The trading gave the company a market value of $10.7 billion, based on the outstanding shares listed in a US Securities and Exchange Commission filing. The surge is the largest since Addentax Group’s stock leaped more than 13,000% in a single day, following its first-time share sale nearly three years ago.
Individual investors appeared to be pushing into Newsmax’s stock, with the company among the 25 most actively traded on Fidelity’s platform, one of the most popular brokerages. Orders to buy shares outpaced those to sell at a greater than two-to-one clip.
The mania for a loss-making cable news network stands in dramatic contrast with the year’s biggest and most high-profile IPOs, after Venture Global Inc. and CoreWeave Inc. realized valuations far less than initially proposed and have traded down in the days after their debuts.
Newsmax’s spiking share price drew comments across popular retail trader forums, with one Reddit user comparing it to GameStop Corp. via a nod to sending shares to the moon — a reference that was common among investors piling into speculative assets like the video-game retailer and Dogecoin. The ticker was the top trending symbol on Stocktwits, a popular chatroom website where individual investors often promote stocks.
Newsmax’s opening-day surge is reminiscent of the meme stock craze from 2020 and 2021 when day traders stuck indoors due to the pandemic would send shares of beaten-down or heavily-shorted companies soaring despite poor underlying fundamentals. At the time, so-called “Reddit Raiders” helped spark a more than 2,000% surge in shares of GameStop, and new meme stocks seemed to crop up every week.
The gains typically were short lived, with the most well-known examples ultimately faltering. GameStop shares have wiped out nearly three-quarters of their value from a January 2021 peak while AMC Entertainment Holdings Inc., another meme stock poster-child, is down 99% from a June 2021 high.