Newsmax secures $1.2 billion standby equity deal

BOCA RATON, FL - Newsmax Inc. (NYSE:NMAX), a media company known for its cable news channel and digital platforms with a market capitalization of $5.77 billion, announced today it has entered into a standby equity purchase agreement with investment firm Yorkville Advisors. The deal provides Newsmax the option to sell up to $1.2 billion in shares to Yorkville over a 24-month period, subject to specific terms and conditions. According to InvestingPro data, the stock has experienced significant volatility, declining 46% over the past six months.

Christopher Ruddy, CEO of Newsmax, expressed satisfaction with the investor response to their recent public offering and emphasized that the agreement offers the company additional capital-raising flexibility. Ruddy stated, "While we are under no obligation to draw on the full amount, this action allows us to maintain a strong balance sheet while adding liquidity to our shares over time." InvestingPro data shows the company holds more cash than debt on its balance sheet, though it remains unprofitable with an EBITDA of -$63.64 million in the last twelve months.

The agreement is designed to afford Newsmax the ability to respond to market opportunities and challenges swiftly, as the media landscape continues to evolve. The company, which operates the fourth highest-rated cable news channel according to Nielsen, reaches over 40 million Americans regularly across various platforms. The company has demonstrated strong revenue growth of 26.42% in the last twelve months, though InvestingPro analysis indicates the stock is currently trading at a high revenue multiple. Unlock 8 additional key insights and detailed financial metrics with an InvestingPro subscription.

Newsmax, founded in 1998 by journalist Christopher Ruddy, has been acknowledged by Forbes as "a news powerhouse" and was recognized by the Reuters Institute as one of the top U.S. news brands. The company’s growth strategy appears to focus on providing balanced coverage and diverse viewpoints to its audience. For comprehensive analysis of Newsmax’s financial health and growth prospects, visit InvestingPro for exclusive insights and advanced financial metrics.

Yorkville Advisors specializes in structured debt and equity investments and has been providing growth and acquisition capital to public companies since 2001. The investment agreement with Newsmax underscores Yorkville’s commitment to supporting companies with solid management teams and business fundamentals.

The financial terms of the standby equity purchase agreement were detailed in a Form 8-K filed with the Securities and Exchange Commission (SEC), which is available on Newsmax’s Investor Relations website and the SEC’s website. This agreement is based on a press release statement and is subject to various risks, uncertainties, and assumptions as outlined in the company’s regulatory filings.

In other recent news, Newsmax has made headlines with its initial public offering (IPO) and subsequent stock performance. The company successfully raised $75 million by selling 7.5 million shares at $10 each during its IPO. Newsmax’s stock opened at $14 on the New York Stock Exchange, marking a notable increase from its initial offering price. Following its debut, the stock experienced an extraordinary 735% surge on its first trading day, closing at $83.51 per share. The momentum continued with a 43% increase in pre-market trading shortly after.

The stock’s meteoric rise reached a peak when it closed at $233, although it has since seen a 25% decline in pre-market trading. This volatility has drawn comparisons to previous "meme-stock" phenomena, characterized by rapid gains driven by retail investor interest. Despite the recent downturn, Newsmax’s market capitalization briefly surpassed that of Fox Corporation, highlighting its significant impact in the media landscape. Investors and market observers remain focused on Newsmax’s stock movements, as its performance continues to captivate attention.

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