Newsmax stock saw another day of wild moves on Wednesday, this time in the opposite direction, cratering after two days of enormous gains.
The move: After a two-day rally of as much as 2,550%, the stock closed 77% lower on Wednesday, ending the session at $52.71.
That came after the shares touched a high of high of $265 on Tuesday. Newsmax priced its initial public offering at $10 a share on Monday.
Why: The stock is highly volatile given the small number of shares in the market available for investors to trade.
The conservative news channel saw a flood of trading activity immediately after it went public. The stock's opening trade at nearly $15 represented an immediate 50% gain.
"Given that it's got a small float, I think that makes it susceptible to these big moves and has that meme stock characteristic," Paul Hickey, a cofounder of Bespoke Investment Group, told Business Insider on Tuesday.
The trading activity has confused other market experts.
"I wish I could offer some clarity here, but I can't," Steve Sosnick, the chief market strategist at Interactive Brokers, said in a note to clients on Tuesday.
What it means: As with popular meme stocks, the huge momentum has been followed by a brutal loss that's likely to burn many retail traders who piled in and helped drive the massive two-day gain.
Similar to Trump Media & Technology Group, which trades heavily on retail investor sentiment, individual investors have piled into Newsmax shares. The high demand and relatively low supply of stock available to trade have helped push the stock price up massively in two days since the IPO.
The explosion in Newsmax stock is reminiscent of DJT in other ways, too. Both stocks rocketed post-IPO despite the companies losing money. Newsmax posted a loss of $72.2 million in 2024 after a loss of $41.8 million in 2023. Annual revenue grew from $135.3 million in 2023 to $171 million in 2024.
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