Conservative news media company Newsmax (NYSE:NMAX) debuted on the New York Stock Exchange Monday morning and it has been on a wild ride since.
Newsmax stock started trading on Monday morning at $10 per share after completing its initial public offering, where it raised $75 million through the sale of 7.5 million shares.
It has since climbed more than 2,500% to a staggering $260 per share and counting.
The stock price rose more than 700% on Monday to close at $83 per share, but it was just getting started.
On Tuesday, Newsmax stock was up another 200% on the day to about $260 per share, as of 3:45 p.m. ET.
That represents a two-day gain of about 2,500%.
Market cap north of $20 billion
It had a market cap of more than $20 billion as of the end of the day Tuesday, according to Yahoo Finance. That would make it a large cap stock, which are typically stocks with a market cap of at least $10 billion.
Before trading started on Monday, Newsmax had a market cap of $1.2 billion.
“We’re going out with a market cap of $1.2 [billion]. But we don’t see ourselves as a value stock. We see ourselves as a growth stock. So those multiples are going to be a lot higher,” Newsmax founder and CEO Christopher Ruddy told CNBC on Monday morning.
Newsmax would not qualify for the S&P 500 however, as it does not have positive earnings.
Trading was so fast and furious, it had to be halted multiple times on Monday and Tuesday as things got overheated and had to be paused.
Reminiscent of GameStop
The meteoric rise is reminiscent of the meme stock surge by GameStop (NYSE:GME) and AMC (NYSE:AMC) in 2021. As mentioned, the company reported a net loss last year.
Just last week, AI stock, CoreWeave (NASDAQ:CRWV) launched its much-anticipated IPO at $40 per share. It has jumped about 22% over the past two trading days to $49 per share, but certainly nothing like Newsmax.
With a phenomenon like Newsmax, investors have to be very cautious because of the extreme volatility. The ride has been wild, but without a catalyst or earnings to back up that kind of growth, it will eventually come back down and find its level. In addition, investors will probably start taking profits.