Newsmax eyes IPO and launches $225M placement
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Newsmax CEO Chris Ruddy, in March 2023. Photographer: Al Drago/Bloomberg via Getty Images
Conservative TV network Newsmax said it's planning to go public and launched a $225 million private placement.
The big picture: Conservative companies see a financial opportunity in tapping into retail investment interest on the public market.
Zoom in: In an investor presentation, Newsmax quoted former President Donald Trump saying, "You like Newsmax, I like it too . . . Newsmax has been really good . . . people are watching it . . . it's terrific."
- The company said it plans to go public later this year or in 2025 either on the NYSE or Nasdaq with an offering of up to $75 million. Newsmax disclosed details of the $225 million private placement in a regulatory filing on Monday.
- It cited a lack of trust in mainstream news sources and viewership growth as opportunities for the firm as a publicly-traded company. It touted future expansions into streaming, digital subscription products and e-commerce as other key growth areas.
- The Boca Raton-based company earned $135 million in top-line revenue last year, it said, down from $148 million in 2021 following the January 6th Capitol siege. It's projecting $180 million in revenue this year.
- It didn't say whether it was profitable, but predicted it would achieve "30% + EBITDA margins within the next few years."
Catch up quick: Newsmax launched as a digital property 25 years ago and expanded into cable in 2014.
- It faces two large defamation lawsuits from voting tech companies Dominion Voting Systems and Smartmatic over its coverage of the 2020 election.
Reality check: Companies often present lofty projections to raise money ahead of their IPOs. And other conservative companies have not been able to ride the same retail investor wave as Trump Media & Technology Group.
- Shares in Rumble, a conservative alternative to YouTube that went public in 2022, are up more than 33% year-to-date, but are down 40% overall since its IPO.
- Shares in Public Sq., a sales marketplace that promotes retailers with conservative values, are down 32% this year and more than 60% since it went public last year.
Yes, but: Shares in former President Trump's publicly-traded media company, which houses his app Truth Social, are up 32% since the company went public in March, despite the fact that the company continues to lose a lot of money.
Bottom line: 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.
