Loyal Newsmax viewers who listened to the channel’s entreaties last year and lined up to buy $10-per-share stakes in the company are feeling pretty rich right about now. Those shares are currently worth nearly $200 each.

This week’s IPO has been a monumental success for the pro-Trump talk and news channel, which has long been an also-ran in a sector dominated by Fox News.

Newsmax CEO Chris Ruddy, who is now a billionaire on paper thanks to the stock’s explosive performance, told CNN, “Last election Americans voted against the media establishment and similarly investors voted by enormously buying Newsmax stock to say they like us, they value us and they want us to grow.”

Newsmax suddenly has a lot of capital to expand. But the market’s overexuberance has some media outlets calling it a “meme stock.” The stock closed Monday at $83.51 and nearly tripled in value on Tuesday to $233.00. Shares slipped in after-hours trading, however, and some market pros predicted that the stock would succumb to gravity soon enough.

And investors have plenty of reason to exercise caution. The cable news landscape doesn’t exactly scream “growth.” Newsmax’s financials are dreadful. And the company faces a big legal challenge around the corner.

Newsmax was motivated to raise money through an IPO partly due to the defamation lawsuits against the channel stemming from the 2020 election.

Both Dominion Voting Systems and Smartmatic accused Newsmax and other right-wing outlets of promoting lies about imagined voter fraud when Trump was trying to overturn his 2020 election loss.

There was no way Ruddy could afford anywhere near the $787.5 million that Fox paid Dominion in 2023. But what if he ran infomercials on Newsmax and convinced viewers to invest?

That’s what he did in mid-2024. The entreaties were not subtle. Anchors said things like “we want you to be a co-owner” and Newsmax wants you to join us in keeping America safe and strong.” Ruddy sometimes appeared on air for the ads. He recognized a pure-play TV brand would not normally generate Wall Street excitement, so he touted Newsmax’s streaming ventures and podcasts. And he likened his IPO plans to Trump’s media company stock.

Given Newsmax’s small size, weak TV ratings and history of unprofitability – it lost $72 million in 2024 – some industry onlookers were skeptical the IPO plan would work. Last summer Mediaite, citing Newsmax insiders, cast it as “an effort to stave off financial ruin as the network faces two potentially fatal defamation lawsuits.”

In court last fall, a Newsmax lawyer referred to the Smartmatic case as a “bet-your-company case for Newsmax.” But the two sides ended up settling for $40 million. (Newsmax only paid half upfront. The rest is due by July. Smartmatic also had an option to buy Newsmax shares.)