This Newsmax IPO is Actually Insane

Summary

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.

Transcript

[A]

Hey everybody, welcome back to the Bulwark. I'm Tim Miller, here with jvl, author of our Triad newsletter and you know, all around content creation machine. We're here to talk about Newsmax, how capitalism simply doesn't work and the latest insanity from Maga World. Make sure to subscribe to the feed jvl. I guess we should start by explaining because many of our viewers who are the types of people who live on planet Earth, you know, who consume news based on what the facts are and what actually happens in the world, might not even be familiar with Newsmax since It's like channel892 on DirecTV. So maybe share with our viewers what Newsmax is before we get into their, their ipo.

[B]

Newsmax is a conservative infotainment company which has existed for many, many, many years and had its own, it was like sort of cable access. It had a magazine for a while, it was a website for a while and then it became sort of a TV network. Not really. I would say it is three steps above Wayne's World.

[A]

Three steps.

[B]

Three steps above Wayne's World two and a half. It is owned by an impresario, Christopher Ruddy, who is sort of just going back to the Clinton days and the Arkansas Project and all that.

[A]

He was. The Pittsburgh Tribune Review is owned by this guy, Richard Mellon Scafy.

[B]

Yes.

[A]

Like who owned a bunch of like right wing anti Clinton stuff and he took Rudy under his wing. I guess it's kind of media magnate in the, you know, pushing. The Clintons accidentally killed Vince Foster kind of stuff. That's where he came from.

[B]

Yes. And during the Obama.

[A]

Not accidentally, I'm sorry. The Clintons purposely killed Vince Foster as.

[B]

They, as they would tell you in their case, body up in an oriental rug that they carried out of the Rose Law firm. Again, you've got to be an old person to understand all these jokes and what they. During the Obama years, they stood this up as an actual real kind of cable access network. And then yesterday they did an ipo.

[A]

I need to pause before you do the ipo because there's one other key inflection point for Newsmax.

[B]

Sure.

[A]

Which was when Donald Trump started to say that he had actually won the 2020 election and not lost it. And Fox was doing the thing that it was like, yeah, you know, he's making some points here. But on the other hand, you know, not sure. Newsmax went full state TV, like went fully to the mattresses. Mr. Trump was the winner. Chinese bamboo ballots and the death of Hugo Shove. I Think they bought every conspiracy, the stupidest conspiracies under the sun, and they're ratings 10x. Yes. And so, yes, over the course of that little period, their audience share grew significantly and still way less than Fox and like the regular domain cable networks. But, but, but it was, but it was that.

[B]

That convinced Fox to change course.

[A]

Yeah, yeah. And become more full, unapologetically pro Trump maga and, you know, ended up getting them in trouble with Dominion, et cetera.

[B]

So in a way, you could say that Newsmax's ratings during that like 10 day period when that happened, cost Fox $800 million.

[A]

Right? Yeah, right.

[B]

Is that an unfair way to put it, Tim?

[A]

No, because they felt like they had to compete and then they started dabbling more in the, in the, in the election conspiracy, and then they end up losing the lawsuit to Dominion. Okay, so that's the Newsmax backstory. Ruddy. I've had brunch with Ruddy, so we'll talk about this. I know this man a little bit. It's pretty intriguing what has happened to him. Yesterday they do an IPO, get US$10 a share.

[B]

10. $10. Tim, you understand that when, when companies do IPOs, the goal of the IPO is to price it at about where the market wants it to be.

[A]

Yeah, yeah. Maybe a little under, you know, gain a little, get a little show a little momentum. But. But in the ballpark, I mean, I.

[B]

Remember when Facebook IPO'd at like $35, I think, and it shot up to 70, and people thought that was crazy. Facebook underpriced. They 2X. Well, yesterday, Timothy, they IPO'd at 10 and went to 85.

[A]

90, I think.

[B]

And today, as we sit taping, the market has corrected. So the good news is the market realized that it made a terrible mistake with Newsmax yesterday. The bad news is that the market decided that it undervalued Newsmax by half yesterday. And so Newsmax has shot up another hundred points today.

[A]

Get me a dsa. T shirt. Get me a dsa. I think this is not. This is not capitalism. What is happening? They're at 210. Like, they've gone up 2,000%. And this guy Ruddy owns like 80% of the stock.

[B]

Ruddy owns 80% of the stock. I want to just put some financials behind this so that we understand Newsmax operates at a scale as a business that is much closer to the bulwark than it is to Fox News.

[A]

Okay, wait, so you're telling me maybe we should ipo?

[B]

I'm not saying any. This is not financial advice, Tim. Okay, but Newsmax's 2024 revenue for the first half was up by a third and their total revenue was still only under $80 million for the first. So they're about $150 million in revenue a year. Okay. Which if you are a substack, is amazing mood. They'd be the biggest sub stack in the, on the, in the planet if they were a YouTube channel. They wouldn't be the biggest YouTube channel, but they'd be a very big YouTube channel. Good for them. They aren't profitable, though. That's the other thing.

[A]

I thought you said they made 150 million.

[B]

150 million in revenue. Revenue.

[A]

What was the expenses net?

[B]

They still seem to be about minus 100 million a year. So, you know, you got to spend money to lose money.

[A]

So they're lost.

[B]

This is what they all say in business. You got to spend money to lose money.

[A]

So Newsmax is losing. So they actually aren't that really comparable to the Bulwark. They're. They're really more comparable to Trump ico. Yeah, much closer.

[B]

Actually. They're much closer to Truth Social. Yeah, true Social, except that they're now valued at many multiples of Truth Social, even. But here's, here's what I want to point at the insanity because oftentimes when you see a, when you see a stock pop like this, especially in tech, it isn't because the company is profitable, but because their growth potential is enormous. And this is typically seen through revenue. Right. They're just dealing with enormous amounts of revenue. And even if their expenses are high, well, then so be it. They'll figure out a way. Right? This is famously Amazon. Amazon lost money and lost money and lost money, but the total amount of revenue they were bringing in was so huge that people realize, well, eventually they'll figure this out, the hood economies of.

[A]

Scale with new stuff or there'll be some other kind of growth thing that's going to come where they're a new entry to a market, they're going to start a new market. I don't reveal anything but like, you know, my, my husband worked for a food tech company. There was a moment where there's this big excitement around this, like, oh, the future of food is going to be totally different. People are going to. And, and you know, one of the competitor companies in the space was like one of the first ones to ipo, and they shot up similar. Not, not, not Newsmax numbers, not Newsmax. Yeah, but they shot up pretty Good. And, and ended up falling back down. But like it was on this bet that they were going to kind of displace one of the major food companies because their tech was so good. It didn't actually really work out. Right. So that there are situations where it makes sense for a stock to be higher than revenues because investors are assuming that there's some long term growth potential or some innovation or whatever that is going to.

[B]

I mean, and again that makes sense in an environment with zero interest rates because money is chasing returns and is willing to speculative. We're not in that environment right now.

[A]

That's a good point.

[B]

But what I'm trying to say, Tim, is they don't even have large revenues. So they are not profitable and their revenues are small. But here's the third part part of the story. They're in a dying sector, right? Newsmax is in linear. It's not a new technology, linear cable, which is in, in the process of disaggregating and dying. Everybody's moving off of the cable. And so this is, you know, to the extent that they have revenues, they are like the other linear cable news networks. They're derived from carriage fees that they are paid by cable companies that is dying. That model is going away.

[A]

Right? And this is Blockbuster. And this again point like the third thing, like the revenues are low, they're losing money. And it is not a business that like is going to disrupt something in this.

[B]

It's as if somebody started up a competitor, a tiny mom and pop competitor to Blockbuster in the final like three years of Blockbuster's lifespan while Netflix was all the way to eating its lunch. And then this mom and pop VHS shop IPO'd and the stock market went crazy for it. That's, that's the analogy.

[A]

This is why I'm turning. This is why I'm gonna have to go full Bernie. I mean the only way that this actually works is free market capitalism really works, is a system that works, is that this stock absolutely tanks and a bunch of people eat their shirt on it. But I like, I don't what is. To me, this feels more like GameStop and all that kind of stuff. Like I guess it's moved into the meme stock phase. Like what is, what is happening?

[B]

So I don't know though, but I do want to give one more piece of comparison.

[A]

Okay.

[B]

I would like to compare because I would think in a rational market world the obvious comp would be News Corp. And so people would say, okay, so Fox News, which is the nearest competitor, does some Very large multiple of both revenues and profits as Newsmax does currently. And so in a perfect world where Newsmax experience hockey stick growth, then maybe someday they could be News Corp. Currently, News Corp shares are sitting at $30 a share with a implied market cap of just under 16 billion. So they are worth not quite a little more than half of Newsmax. And I would say News Corps is not just. It's the Wall Street Journal, it's the Fox Corporation, it's some UK papers. This is insane, Tim. This is insane. And that then leads the question of like, so where's this coming from? Is this our Wall street bets? Is this, is there some coordinate effort to push this up? Is somebody. I don't get it.

[A]

So foreign. Is it a backdoor deal?

[B]

Right?

[A]

I guess. I mean, like the options. Let's just go through the realistic options. There is somebody pumping it, right? Like maybe a foreign interest whale. A whale. There's a single whale that is pumping it. Or like a series of bots, you know, whales. Like you have a series of, you know, kind of a, A network people that are pumping it. It's a troll, right? Like there's a group of. This is the Wall street bets, right? Like it's a troll and a bunch of people thought it was funny. And then a bunch of retail investors got, you know, jumped on the bandwagon of the troll. I. Or I mean like three is like real corruption, right? Like, it is similar to the Trump coins where Ruddy and Trump. Ruddy and Trump talk a lot. Again, this takes about us back to Ruddy. Ruddy lives there. He's a member of Mar A Lago. Like him and Trump hang out and talk a lot. And in way back in 2016, Ruddy was hedging his bets between Jeb and Trump and we had a, we had a brunch and he's just like, he's a deal maker. He's just a guy, you know what I mean? Like, he is just trying, he wants to be on the inside. He's like, he's name dropper. He's all that. So I don't know, maybe there's, there is something more sinister here and like people are trying to run up Ruddy's valuations and then there's a backdoor. Again, I'm just trying to like, what are the other possibilities besides corruption? Corruption, troll and some whale or network of whales pumping it. What's the other option?

[B]

I think those are basically the options. Now what would make that possible here is because again, Ruddy holds so Much of the stock that what is on the market trading is a relatively small amount of Newsmax stock. And so their trading volume is like a quarter of news cores. So even though it's, it's trading a much higher price, there are just fewer shares of it floating around right now out in the open market. But it does create like a huge wealth transfer. I mean Chris Ruddy just became a 10 billionaire. I mean he's not, he's not, he's a trait. He's Chris, Chris Ruddy is now in the Trace Commerce Club and oh, deep into it.

[A]

It's, I think that, I mean probably he's worth 6, 7, 8 billion.

[B]

Yeah.

[A]

Right now.

[B]

Yeah. It's a wild, wild thing. And it's just, you know, capitalism. Two cheers, one, one cheer. Irving Kristol famously wrote two cheers for capitalism. And I was always sort of like a one and a half tier for capitalism kind of guy, slowly winching that back to one cheer for capitalism. Because I want to, we should say capitalism has done more to lift more people out of poverty than any other economic system. And it has, it has greatly enhanced human flourishing. But man, you look at shit like this. What is your Chris Ruddy story?

[A]

No, just, it was just that, just that like he called me and I didn't know this guy was, he runs Newsmax and he asked me to go to brunch. Took me some really fancy brunch in Miami. And it was just all. He was just so sleazy. Like it was just such a deal maker type thing. Like it was, it was not the type of meeting I've had meet like so back then, when I was a, when I was a PR flack for candidates network like media executives would ask to meet sometimes they would want access to the candidate. They would want, you know, inside information, maybe scoops, you know, want to make sure that lines are open in case something happened. Right. There are many like genuine above board reasons for a media company to want to meet with the PR flack for a, for a politician. His meeting was like, what can we do for you? Kind of deal? You know, like can. We'll send out an email with your thing on it. You can write whatever you want, it'll be free PR just like it was a very like the sleaziness of it was just very like above board. And at the time, I'll just admit it's like a young ambitious PR guy. I was like, oh, this is cool. Like I've got an in with Newsmax. Like I can get them to write Whatever I want for my candidates and my bosses will think it's great because we got this nice story written about my candidate. But like in the, in this context, with the benefit of the hindsight and the benefit of him playing this with a lot more nefarious characters, I just, there's no reason to trust any like that there is anything even remotely above board happening over there.

[B]

Yeah, I want to, I want to slip in one other, one other piece of information here to inform people's opinion of what might be happening while Newsmax is up. The Dow Jones industrial average is down 273 as we are sitting here right now taping. So the, the market broadly is pulling way back. The S and P also down today. The Nasdaq also down today. The rest of the market is pulling back. Companies are hemorrhaging money and Newsmax is the safe harbor that capital is flooding to because it's not right. Linear cable news is the future.

[A]

I want to add one more fact on this because I'm looking at the Axios thing. Rumble, which is the competitor YouTube. We're here, we're here on YouTube. Rumble, which is a competitor that has a valuation right now of 2.5 billion market value, whatever that is. 10% of Newsmax. Like again, going back to your theories of the case, right? Like at least with Rumble you could like conjure a theory that like there is such enough of a demand for a right wing YouTube that it could grow into the future and expand and maybe, you know, it's a platform, at.

[B]

Least platforms can expand. Newsmax is just a content mill, right? Just collective.

[A]

So I just, you know, I mean like there's an Axios story right now about how like that there's this Trump bump for MAGA companies and Rumble and Trump Media is one of the ones they use. But even in that context, it's crazy for newsmax to be 10x that I mean like as opposed to Roll, which again, it just shows things are fishy. That said, final question. Are you sure we shouldn't ipo? Because maybe this is our moment. Maybe this is our moment. Let me tell you, if we ended up having a $27 billion valuation, let me tell you, I would use a lot of that money for good. You know, I would use support pro democracy causes.

[B]

I sure.

[A]

Not all of it, not every single cent of it, but I would use some of it to, you know, help my community.

[B]

It's a wild, wild thing. And it's going to be interesting to see what happens with Newsmax over the next I would say the rest of this week to see where it settles. Do the tariffs, because we're gonna get the big tariff. This is the other thing you saw. Trump is doing his tariff announcement tomorrow, but he's doing it after the markets close at 4. Will that, will that impact Newsmax at all, or are they tariff proofed?

[A]

I think they're probably tariff proofed.

[B]

Yeah. It's, you know, this is the world. All systems are functioning. Everything's going great, guys.

[A]

Dsa. Okay. Anyway, everybody. Don't listen to that Sara.