Newsmax officially debuted on the US stock market this Monday, closing up 735% on its first day and being temporarily halted multiple times due to trading volatility. On Tuesday, the stock surged another 179%, reaching $233, with its market capitalization expanding to $29.92 billion. Since its IPO on March 31, the stock has risen by 2,240%, showing an astonishing increase.

The stock has gained significant popularity among retail investors, with its trading pattern similar to other meme stocks like GameStop (GME) and AMC Theatres. "Meme stocks" are those that gain widespread attention due to social media, forums, or internet culture, with their prices driven more by collective action from online investors than by company fundamentals or financial performance.

This extreme surge appears to be a repeat of the meme stock frenzy of 2020 and 2021, when retail investors flooded into small-cap stocks, driving their prices up dramatically, but the market’s valuation of these companies’ fundamentals lagged significantly. According to relevant data, Newsmax’s revenue last year was only $171 million, meaning that at Tuesday's early trading price, its price-to-sales ratio exceeds 85x, far higher than the valuation of GameStop and AMC at their peak.

However, the extreme rise of this stock also serves as a reminder for investors to be cautious of risks. Data shows that in the past five years, only 7 new stocks had an opening day gain of over 700%, but these companies saw an average price retracement of 94%, with some stocks losing nearly 99% of their peak value. Investor sentiment on Newsmax's price surge is divided. Some investors support its anti-mainstream media stance, driving up the stock price, while others remain cautious, worried about potential price bubbles and the risk of a correction.

How to purchase Newsmax on uSMART

First, log into the uSMART HK app and tap the 'Search' option in the top-right corner of the page. Enter the stock code, such as '00700.HK,' to access the detail page where you can view trading details and historical trends. Next, tap the 'Trade' button in the bottom-right corner and select the 'Buy/Sell' option. Finally, fill in your trading conditions and submit the order.

(Image source: uSMART HK)