Bulwark Takes: This Newsmax IPO is Actually Insane – Detailed Summary

Release Date: April 1, 2025

Introduction

In the April 1, 2025 episode of Bulwark Takes, host Tim Miller engages in a robust discussion with jvl, the author of the Triad newsletter and a prolific content creator. The episode delves into the tumultuous IPO of Newsmax, scrutinizing its financials, market behavior, and the broader implications for capitalism and media landscapes.

Background on Newsmax

The conversation begins with an essential overview of Newsmax for listeners unfamiliar with the outlet.

• Defining Newsmax:
  jvl (B) explains, “Newsmax is a conservative infotainment company which has existed for many, many, many years... it became sort of a TV network” (00:44).

• Ownership and History:
  Tim Miller (A) highlights Newsmax’s ownership, noting, “It is owned by an impresario, Christopher Ruddy... pushing... the Clintons accidentally killed Vince Foster” (01:12).

• Media Influence:
  The duo discusses Richard Mellon Scafy's role in nurturing Ruddy, tying it back to anti-Clinton media initiatives and the transformation of Newsmax over the years (01:29).

The Impact of Donald Trump’s Claims on Newsmax

A pivotal moment for Newsmax was when Donald Trump asserted he had won the 2020 election.

• Shift in Network Stance:
  A states, “Newsmax went full state TV, like went fully to the mattresses. Mr. Trump was the winner... ratings 10x” (02:20). This pivot significantly boosted Newsmax’s viewership.

• Effect on Competitors:
  B claims, “That convinced Fox to change course... end up losing the lawsuit to Dominion” (03:03), attributing Fox’s strategic shifts partly to Newsmax’s surge.

Newsmax’s IPO Frenzy

The core of the episode examines the recent IPO of Newsmax, unpacking its unprecedented market behavior.

• IPO Details and Immediate Surge:
  A remarks, “yesterday they do an IPO, get US$10 a share” (03:47). B contrasts this with Facebook’s IPO, noting, “they IPO’d at 10 and went to 85” (04:04).

• Market Correction and Valuation:
  Initially mispriced, Newsmax sees a correction: “the market realized that it made a terrible mistake with Newsmax yesterday” (B 04:46). However, the stock continues to soar, reaching “210... gone up 2,000%” (04:46).

Financial Analysis of Newsmax

The hosts delve deeper into the financial health of Newsmax, revealing concerning metrics.

• Revenue and Profitability:
  B provides, “Newsmax's 2024 revenue for the first half was up by a third and their total revenue was still only under $80 million” (05:21). Despite increasing revenues, the company is losing money: “about minus 100 million a year” (06:13).

• Comparison with Industry Peers:
  A and B compare Newsmax’s scale to The Bulwark and other media entities, emphasizing its limited profitability and size compared to giants like Fox News.

Speculations on Stock Surge

A significant portion of the discussion speculates on the reasons behind Newsmax’s meteoric stock ascent.

• Growth Potential vs. Reality:
  Drawing parallels with Amazon, B suggests, “when you see a stock pop like this... is because their growth potential is enormous” (07:18). However, skepticism arises due to Newsmax operating in a “dying sector” (08:27).

• Market Environment:
  B notes the unfavorable market conditions: “We’re not in that environment right now” (08:28), contrasting the current market with the speculative fervor of low-interest-rate times.

• Comparative Valuations:
  Comparing Newsmax to News Corp, B states, “News Corp shares are sitting at $30 a share... News Corp is a little more than half of Newsmax” (10:09), highlighting the disproportionate valuation.

Possible Mechanisms Behind the Surge

Exploring potential causes, the hosts consider various scenarios that might explain the stock’s behavior.

• Market Manipulation Theories:
  A and B discuss possibilities like foreign interest, coordinated pumping by whales, bots, or retail investors akin to the WallStreetBets phenomenon (11:19).

• Ruddy’s Dominance:
  With Christopher Ruddy owning 80% of the stock, the limited floating shares amplify the impact of any trading activity: “Chris Ruddy is now in the Trace Commerce Club” (13:36).

Capitalism’s Role and Ethical Considerations

The conversation transitions to a critique of capitalism, questioning the system that allows such anomalies.

• Capitalism Under Scrutiny:
  A expresses frustration: “This is not capitalism... What is happening?” (04:46). The hosts debate the ethical implications of Newsmax’s rise, with A leaning towards a more critical view of free-market operations.

• Personal Reflections:
  A shares personal experiences with Ruddy, painting a picture of dubious business practices and untrustworthy dealings (14:27).

Broader Market Context

To contextualize Newsmax’s IPO, the hosts examine the overall market trends during the episode's recording.

• Market Trends:
  B notes, “The Dow Jones industrial average is down 273... the market broadly is pulling way back” (15:59). This decline contrasts sharply with Newsmax’s stock performance, raising questions about sector-specific dynamics.

• Comparison with Other Platforms:
  Discussing Rumble, a right-wing YouTube competitor valued at 2.5 billion, A points out Newsmax's disproportionate valuation: “it just shows things are fishy” (16:50).

Concluding Thoughts and Forward Look

As the episode nears its end, the hosts ponder the future trajectory of Newsmax and the implications for investors and the media industry.

• Future Prospects:
  B remains cautious, noting the uncertainties surrounding Newsmax’s sustainability: “it's going to be interesting to see what happens with Newsmax over the next... week” (18:22).

• Capital Market Implications:
  With impending political events like Trump’s tariff announcement, the hosts speculate on potential impacts, although A humorously dismisses the relevance: “I think they're probably tariff proofed” (18:49).

Notable Quotes

• “This stock absolutely tanks and a bunch of people eat their shirt on it.” – A (09:17)
• “Newsmax is just a content mill, right? Just collective.” – B (17:34)
• “Capitalism has done more to lift more people out of poverty than any other economic system.” – A (14:22)

Conclusion

The episode presents a critical examination of Newsmax's IPO, highlighting the disconnect between the company's financial health and its market valuation. Through insightful dialogue, Tim Miller and jvl underscore concerns about media influence, market manipulation, and the ethical dimensions of contemporary capitalism. As Newsmax continues to defy conventional financial wisdom, Bulwark Takes leaves listeners contemplating the sustainability of such market phenomena and the broader implications for the media landscape.