For humans and AI trading the stock, it’s just a spectacularly fun video game. For observers, it proves this market is dangerously nuts.
By Wolf Richter for WOLF STREET.
The craziness of this situation is hard to convey with a straight face. “Craziness” is probably the understatement of the year. It shows just how nuts this joint called the stock market is. It’s like whatever.
Newsmax [NMAX] went public via IPO on Monday March 31. At the IPO price of $10 a share, it raised $75 million, which seemed reasonable enough for an IPO of this type. Then out the gate, it started trading at over $14 a share, and that would have been a nice first-day pop of over 40%, but then some stock jockeys and AI got a hold of it, and WOOSH. By the end of the day, it was at $83 a share. Intraday on April 1 Fools Day, it spiked to $279 a share, up by 2,600% or whatever from the IPO price of $10 a share. And then it imploded.
It is currently trading at about $50 a share, down by over 80% from the all-time high yesterday and has thereby earned a place in our pantheon of Imploded Stocks. To make it into the Imploded Stocks, shares have to have plunged by 70% or more from the all-time high. Normally, it takes companies quite a while to accomplish this.
The Newsmax trade may be a record in terms of overall craziness, up 2,600% or whatever in less than two days, and then down by 80% in a little over one day, and straight from IPO into our Imploded Stocks in three days.
At the peak, the stock had a market capitalization of about $21 billion, which is unspeakably huge for a media company and purveyor of supplements and insurance products with $171 million in annual revenues.
By comparison, the media empire News Corp has a market cap of $16 billion, but it has annual revenues of $10 billion, about 58x more than Newsmax’ revenues. And it had $354 million in net income. It owns, among other things, the Wall Street Journal, Dow Jones & Company, book publisher HarperCollins, some big UK publications, real estate publications including realtor.com, etc.
So pushing the share price of Newsmax to a market cap of $21 billion in no time shows the extent of this nuttiness. It’s really just like whatever. It’s just a video game. Have fun and go home.
Even at $50 a share, Newsmax is up by 440% from its IPO price, which is still huge, and still a huge market capitalization for a company like this.
Newsmax is not a big company. And it’s not profitable either. According to its annual report filed with the SEC on the day of the IPO:
- 2024 revenues: $171 million; net loss $72 million.
- 2023 revenues: $135 million; net loss $42 million.
Obviously, none of that mattered. The humans and AI that were trading it didn’t care one iota about the company, its puny revenues, or its losses. It was just a spectacularly fun video game. But for observers, it proved once again that this market is dangerously nuts.
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This market is a freaking joke with crap like this. Even the casino blackjack table is more predictable at this point..
Btw, judging by after market that after the libration announcement, tomorrow is going to be fun day… The once in a lifetime buy the dip moments for all the FOMO retailers.. Happy hunting..
Howdy Phoenix. Bet Buffett is still buying T Bills…..
With violatility like this….people buying T bills and have been grinding their teeth missing out when everyone are jeering over double digits gain don’t look as stupid now I am sure…
We may be seeing double digit losses in those stock gains soon, but that can be a tax write off of $3,000/year!
Not to be a stickler distracting from the main point you’re trying to convey, but casino blackjack is actually a low variance game (lower bankroll swings).
Newsmax stock would be more like a 100-play Triple Bonus Poker+ video poker machine at the casino. Now’s THAT’S variance!
Wait until tomorrow if you want to see fireworks!
Black Monday 2.0? Probably not…
Btw…Newsmax, Vinfast sends their warm regard…think your crazy pop put theirs to shame….
No, it’s going to be Armageddon Thursday.
I trademarked that expression.
Armageddon Thursday. It’s tomorrow.
Wow, love the imploded stock alerts!
I’m not saying this is October 1929 by any means, but just noting, back then, it didn’t all go in one day. It bumped down an irregular set of stairs. But the crowding phenomenon was active then, as a few freakish drops got attention and gathered steam.
Yes, shorter attention spans and “gamification” (spam-ification, scam-ification) will make for some fireworks.
I dumped a lot of equities lately (from my relatively small stash), and am warily watching.
Should be a Great show!!! A barn burner — but by summer I think we’ll have a 100 year event in place, a dazzling display of a super nova mkt:
In total, some 185 counties are impacted by the tariffs, and the new duties set the US tariff rate at its highest level in over 100 years.
The new tariffs are less than the tariffs other countries have long been imposing on our exports to them. So what’s the big deal? They’re doing it, why can’t we?
It is all about balance. Even with these ‘unfair’ tariffs, America is still richest country on Earth. I just don’t see how declaring tariffs war on rest of the world ends well.
You’re just worried about your stocks. You can always sell them if you don’t like tariffs. These countries declared your “tariffs war” on the US long ago. Some of those countries are richer per capita than the US. I don’t understand why this is so hard to get?
We can and we will Wolf. The issue is not whether tariffs are or are not the right thing to do for the country (I think they are.) The issue is the stock market does not like uncertainty – regardless of the source. Particularly when so many stock investors are sitting on (very) large unrealized gains.
.
What is in the long-term best interest of the country will not necessarily be in the short-term interest of the stock market. I don’t know if the market will regard these tariffs as an “exogenous shock,” which is the BS term used by the MSM for an unexpected outside factor that substantially impacts the market averages.
However, it is possible that some/many stock investors perceived the tariff discussion in Washington as “just talk” that would not actually be implemented.
As this is written the Dow futures are down over 900 points for Thursday’s opening. Should be an interesting day. Might even be time to crack open the dry powder keg.
So is the goal to get them to stop imposing tariffs or are you saying tariffs are overall smart policy?
China has grown GDP 7% or more for 21 years within a planned economy. They did it, so why can’t we? Europe provides universal health care to all citizens on half our GDP per capita. They did it, so why can’t we?
Obviously we can do whatever we want–the issue is whether it is beneficial given the conditions of the US economy.
William McDonald,
“So is the goal to get them to stop imposing tariffs or are you saying tariffs are overall smart policy?”
I don’t know why I have to keep repeating it over and over again:
The #1 goal of tariffs is to bring production back to the US and end “globalization at the expense of the US”;
The #2 goal is that, if companies decide to import, then they will pay a tax on their profit margins of the imported goods, which forces companies to pay taxes that otherwise wouldn’t pay taxes, such as big pharma companies that run their profits through Ireland and pay zero income taxes in the US. Trump used that example yesterday.
So, yes, tariffs are a smart long-term policy, and nearly all countries have been using them to a much greater extent than the US.
But they’re bad for stocks because they’re tax on profit margins, and extract taxes from companies that would otherwise not pay income taxes in the US. Hence lower stock prices. The market understands that just fine, as you can see.
But allowing an addiction to inflated stock prices dictated economic policies in the US is nuts, and I’m glad that it’s finally changing.
Cold in the Midwest-
“The issue is the stock market does not like uncertainty…. Particularly when so many stock investors are sitting on (very) large unrealized gains.”
Every stock market bubble is plagued by “uncertainty.” Market valuations will always be based on mob psychology , and necessarily based upon changing circumstances and imperfect conclusions. Look at PE ratios for 1900, 1929, 1999, and 2019 for context.
The stock market is short-term-unpredictable, as evidenced by Alan Greenspan’s 1996 Irrational Exuberance speech. Though ultimately correct, it was laughably incorrect for four long years.
Good luck to those who confidently speculate on their own ability to time the arrival of the next correction!
The US has a quite balanced trade balance with the EU, with a deficit in goods and a surplus in services. The current US administration only focuses on goods though, which is patently absurd. Moreover, Trump seems to think VAT (value added tax) in the EU is a tariff, when it is actually more akin to what in the US would be labelled a sales tax, applied regardless of provenance.
Corto Norvegese
That is total BS. Trade with the EU is not in balance. I don’t know where you come up with this nonsense. But you’re a European troll, so that explains your comment.
In addition: Services exports of the US fall mostly into two categories:
1. foreign tourism in the US – the money foreigners spend on lodging, restaurants, rental cars, airfares, etc. in the US, all of which are fairly low-level economic activity, unlike manufacturing of high-value goods, such as cars or semiconductors.
2. sales of IP, such as software, movies, etc., that have already been made for and sold in the US and whose sales in Europe make the companies rich but create ZERO additional economic activity in the US. Which is why services exports don’t have a lot of effect on the US economy, unlike manufacturing.
Here is the huge trade deficit in goods that US has with the EU:
https://wolfstreet.com/2025/02/05/trade-deficit-in-goods-worsens-to-all-time-worst-in-2024-small-surplus-in-services-improves-overall-trade-deficit-worsens-by-17/
It is amazing how few American cars are sold in Europe compared to the number of European cars sold in the US. It is easy to spend a week in Europe without seeing a single American car but it would be tough go even one minute on a freeway in the Bay Area without seeing a European car.
Thanks for your sane analysis on this topic. The world and media are so deeply politically polarized that it’s difficult to see through the haze and view any idea based on its own merits.
Problem with this is that next US president may lift the tariff and all these businesses moving productions back to US will be screwed. US lacks consistency. If US doesn’t want foreign trade, then so be it. Businesses can adjust certainly. It is this uncertainty that is causing a meltdown.
Wolf,
The really tragic thing about how Trump is going about trying to (mostly appropriately) rebalance intl trade, is that he is failing to accurately explain *how* China (and it really is mostly China that has mostly/most energetically driven US trade deficits of the last 20 years…with sporadic inclusion of oil exporters) engineered the whole thing.
And by mis-explaining the techniques (“blah blah non-tariff barriers…blah blah unfair predatory this that…blah blah”) he opens the door to policy blow-back/failure of reform.
And cumulative trade deficits in the trillions and trillions and trillions over 50 years desperately require intl trade changes that *stick*.
Basically, China managed to pull off the last 20 years by,
1) Indirectly convincing their population to work their ass off to produce world beating prices on everything under the sun,
2) **Key Step** Essentially prohibiting their population from using the US dollar proceeds from the massive export sales to buy even a reasonable fraction of foreign/US goods – which would otherwise restrain trade deficits. The Chinese government then used these “locked up” export proceeds to indirectly subsidize artificially low domestic interest rates for further Chinese domestic industrial capital investment.
3) That is a *bit* more complicated than “bad guys have been doing mean things* but by *explaining* things to the US public *honestly* Trump could make the intl trade reforms much more insulated from countervailing lies from foreign interests and US importing goods-flippers/drop-shippers/stiletto-wielding-lobbyist-shops.
4) So it is tragic (again) that the US cannot even be honest in absolutely necessary reform.
5) My depressing guess is that no realistic US government is ever going to allow itself to be openly honest about currency manipulation (foreign or domestic) or its consequences (foreign or domestic).
6) Every political power in the world wants to ultimately hold that currency manipulation power in the (relative) shadows for the day when *it* wants to use it.
7) Honest disclosure to the public would impede that.
8) But furthering the endless rounds of lies, simply perpetually endangers necessary reform, since the enemies of necessary reform can easily poke holes/stoke panic about absolutely necessary reform.
Simply reciting “big beautiful baloney” over and over ain’t going to defend against this outcome.
That is exactly right. Plus, any tariff doesn’t have to be permanent. I think of it more like, “You didn’t eat your dinner so no ice cream for you!”
Meanwhile:
Powell said last month his “base case” is that any extra inflation from Trump’s slate of tariffs will be “transitory” — a view that aligns with the White House.
Still nothing but rate cut, rate cut, rate cut spewing from MSM.
One of the Fed governors already mentioned a rate hike as a possibility if…
I wish the fed would see this sort of crap and realize, hmmm, maybe there’s still too much free money sloshing around, let’s hike rates a bit. Or for every garbage tariff announcement, emergency rate hike. That would solve that whole self-inflicted fiasco in a matter of weeks, if not days.
Except Trump would then just try and abolish the Fed and then it would be just another, possibly even more dangerous crisis and source of uncertainty.
Better to just let his popularity fade farther through a nasty recession and spend 2026-2028 arguing if the “prosperity” or “redistribution” wing of the democrats will win the nomination for 2028 to join their new majorities in both houses of Congress.
“a nasty recession”
A nasty *necessary* recession when the Mag 7 PEs are at 2-3 times historical levels (with unprecedented weighting concentration) while housing prices have tripled over 20 years even as honest median incomes have grown nowhere remotely near that.
The Fed refused to take the punch bowl away for decades (“a permanent high plateau”/”we have an invention called a printing press”) and now the US valuation economy has to go through heroin detox…or die.
I’m sure the administration will pitch it as a “good” recession–a necessary purge and everything will be the best ever imagined in the future.
I’m sure that 25% of voters will parrot that line and the rest will vote with their pocketbooks and the swing will be towards dems in the midterms, followed by the presidency in 4 years.
Polling is very clear that most voters care most about the economy, voted on the economy, and Trump’s popularity is in steep decline since the election, with his worst performance scores centered on handling of the economy.
Many other Ponzi stocks out there. Coreweave (CRWV) just had an IPO a few days ago, it has a valuation of over $28 Billion and has 881 employees, so that’s about $32 million per employee. From what I read, it was some kind of crypto stock and has supposedly been transformed into an AI stock. It was totally dead until options began trading yesterday and it magically took off. They have over $10 billion in debt.
And of course, don’t forget Palantir (PLTR) which still has a market cap of over $200 billion, almost 20% of Berkshire Hathaway. BRKA has a trailing 12 month EBITDA of $126 Billion, whereas PLTR has a trailing 12 month EBITDA of $342 Million. That is not a typo.
You just can’t make this stuff up.
The stock market is not even close to bottoming yet.
When worthless crap coins trade 80K a piece, these don’t seem unreasonable in comparison. Stonk market is always full of degenerate gamblers and conmen. Each decade there are some new type of tulip popping up that is shiner than before.
Yep my wife wanted me to buy the ipo and I told her go ahead this was the last 3 months or when ever they started advertising on tv
Monday she was saying told u so . The news did not report the plunge so she has no idea. I had a better chance of the lottery which I never have played .
if you had a chance to buy the IPO, you could have sold today for 5x your money even after the plunge.
Should have listened to wife.?
Bless you, and every happiness to you both. Reminds me of my ex. In my case, what I traded away was her.
In other news, Wolf Street Media went from $666 per share at market open to 10¢ by the close of the day. But no worries – Wolf Man sold at the top and is now going to buy Tik Tok for the hefty price tag of $1 Trillion.
S&P futures down about 3% on tariff jitters but, in this extremely unrealistic market — with extremely stupid ipo offerings and video game-Ai fantasy hallucinations — I’m not buying any mkt dip that’s not below 50%. I might nibble at 30%, but cash is far safer going forward.
I don’t trust the administration, SEC, FTC, DOJ, Wall Street, AI, insane investors or the Fed, Treasury — it’s all a terrifying and horrific sewer filled with cancer.
I’m seriously worried about the safety of the monetary system and wonder if we’ll have a country in a year.
The old and new regimes both seem problematic, on roads to trouble on different timelines and for different reasons. Where do we turn?
I’m a novice in economics. But I thought a company was basically worth 3 times it’s revenue.
So if a companies revenue was $100 million per year, you could safely pay $300 million to buy it.
Feel free to call me naive & dumb. I plead guilty to that & more.
But paying $21 billion for a company with $171 million revenue sounds criminally insane.
I think retail investors buy something & have not a clue what is going on. It’s like watching a Rookie NBA player spend his money
Blindly assigning a “x times revenue” filter on all companies regardless of other details certainly sounds dumb.
A soap company making 7% net margin vs. a luxury watch company making 70% net margins should have different price/revenue multiples.
I hope you can figure out why?
The sports and gambling worlds have crossovers into recent stock market activity. I think a lot of players are wired up to the same neural rewards systems. So they may need to learn some old lessons in an old, hard way. That goes for the flash-bang gimmicks (crypto and such) being sold by some hangers-on in he new D.C. as well . I just pray it doesn’t infect serious things like banking and money in substantial ways. That is a definite possibility at present.
“IPO price of $10 a share”
It’s always $10 a share with these SPACs & IPO’s.
When Wolfstreet does it’s IPO, it’s going to $10 a share too.
Wall Street is 10% innovative companies & 90% pump & dump criminality. Has it always been like this?
The new SEC is poised to pump more of this, not less. Not that the old one was perfect. But the new one has made some statements showing it not to be completely compromised and ruined. Small consolation, to me.
Imagine all the poor fools who scramble to buy the IPO thinking they are going to get rich quick, and it comes crashing down like Humpty Dumpty. Wow. What a gambling casino on steroids! House always wins.
But they got rich quick if they were able to sell it at 3 pm on Tuesday. But not many were able to sell it then, but some did. Those that missed it were chasing it down.
Over the short-term the stock market is psychotic. Over the long run (30 years or more for the stock market), it might make some sense. No matter how you like to look at it, recall what Keynes said: “In the long run we are all dead.”
thurd2-
“In the long run we’re all dead” was Keynes’ greatest hoodwink.
That statement (in seven one-syllable words) forgives every faulty public policy decision ever thrown at the masses.
I think equities may face some new, not-so-great dynamics longer-term, because of:
1) private equity and private debt and venture capital front-running public equity markets, and
2) corporate law is changing to favor juiced-in classes of stockholders (e.g., Zuckerberg), and compromising old guardrails (Elon intimidated Delaware into watering down corporate law protections, to hang onto its registered corporations, and prevent a flight to Texas and other thirsty jurisdictions).
So the new class of super-winners (so dominant in the emerging society and now in command of all networks, digital and political) are not satisfied with the crumbs the equity peasants (and other types of peasants in this society) have been getting, IMO. This could develop into the society-wide rug-pull at the end of the USSR, but maybe in a slower, more veiled form, IMO. Small retail stockholders aren’t the lowest new class in society, but have been demoted. And their consumer-level protections are being de-prioritized (to put it nicely), too.
Hence the movement of young people out on the risk curve, toward more gambling behaviors, evidenced by events like this NEWSMAX thing.
The markets been down in response to this unfiltered version of Trump who never has to run for office again. Recently, I just buy iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) right before the market closes at 4pm. I dump it for a gain at 9:31am or sometimes around 10am if it’s getting some run. Right now I’m up 14.85% in the post-mkt and will no longer own it in less than 7hrs from typing this. Just a lil tidbit for the Wolf gang since you guys are some of my favorites to read online.
In general, most standard religions proscribed gambling and usury. That was probably to protect people who have low IQ, math ability, or have limited ability to learn from life experience.
But in a non-religious-anything-goes extreme individualist culture, people have more freedom and encouragement to do as they choose. It is no longer slim pickins for stock market mavens and other hustlers.
Just following my stock-watch list, it is clear that Mr. Market takes pleasure in disappointing me. For now, I’m happy to settle with 4% CDs or Treasuries.
At the ripe old age of 74, no way will I gamble lifestyle stability and comfort money on such crazy-skittish markets. Oh, unless there is big bad black swan crash. But when I keep a lot of dry powder, it somehow keeps the black swans away.
@Drifterprof; You just missed the age where students stopped studying, 1965.
@spencer kids still study a little bit, but it is less than in the past since in order to go from the smartest 1/3 of high school students going to college to all but the dumbest 1/3 going to college they needed to “lower the bar” (so the dumber than average kids keep paying tuition and don’t drop out).
“But when I keep a lot of dry powder, it somehow keeps the black swans away.”
So the situation has been. One can only see how it goes from here.
It makes little sense for older people to be playing in the stock market. It is probably okay for younger people because they have enough time left to ride out the crashes. After the 1929 crash, it took 25 years and a world war for the dow to get back to its 1929 level.
Paper profits from the current bubble are not real money. They only become real money when you sell. Even the IRS plays its game like this.
Back in 1929, it took real courage and an expensive broker to play the stock game.
My parents never played since they were close to that generation of people who played and were wiped out. I play but with great caution. That’s why I’m not a Bitcoin billionaire today and nor am I taking payday loans to buy food.
Today, you can take a 30 second break from sports gambling and with a few clicks be back sending your hard-earned income into the stock market or bitcoin instead of a 4% bank account.
It’s just as easy as buying candy in the checkout aisle. I think this causes highs to go higher (can’t lose) and lows to drop lower. However, the ease of use doesn’t allow the lows to stay that low for very long. There’s a sucker with a Robin Hood account born every minute who has heard about that Bitcoin or NVDA billionaire.
That sounded a little cynical though the odds in the market are still better than throwing your money at Powerball or sports betting.
LOL! Please Wolf, let’s be honest. Yes, there are still a few value adding companies out there that do good work and pay their investors a dividend, BUT with all the calls, puts, etc. etc. the larger “market” has really simply become a casino.
In this regarded, having already bankrupted two casinos already, I guess Trump makes sense…
DM: Trump shuts major tax loophole in devastating blow to online shoppers as tariffs have Wall Street bracing for stock market rout
The president spent Wednesday launching his tariff plan and giving a fiery speech criticizing the rest of the world for taking advantage of the United States.
Donald Trump signed an executive order as part of his ‘Liberation Day’ plans that charges a 30 percent tax on orders under $800 from foreign retailers — a move that could change the face of online shopping forever.
The president spent Wednesday unveiling his sweeping tariff plan, delivering a fiery speech accusing other nations of taking advantage of the US.
Now, a jittery Wall Street is bracing for chaos Thursday morning as US stock markets open for the first time since Trump unveiled the higher-than-expected tariffs.
Initially overshadowed by the broader tariff announcement, an executive order that closes what’s known as the ‘de minimis’ loophole, a century-old trade law that allows imports valued under $800 to enter the US duty-free — provided they are shipped directly to individual buyers.
Shutting down this exception could be the death knell for companies like Shein and Temu, which rely on direct shipments from China and Hong kong that allowed them to bypass US import fees with the loophole.
Under the new rules, imports valued at $800 or less will now face either a 30 percent duty or a $25 per-item fee, with that rate set to double to $50 per item after June 1..
The impact will be huge. US Customs and Border Protection processes over one billion de minimis shipments per year, with Shein and Temu alone accounting for nearly 600,000 packages daily.
“The impact will be huge.”
Yes, on these Chinese cheaters. It shuts down their business model. Americans can buy from the online stores of clothing retailers or manufacturers in the US, Walmart, Amazon, Macy’s etc. instead of from the Chinese cheaters that have abused the US system.
It was HIGH TIME to shut down these Chinese cheaters.
Taking advantage of a loophole is not cheating. In some ways, it is being smart. The bad guys are the ones who left the loophole in when they made the rules and didn’t do anything to eliminate it.
What about those with their 401ks that have to take RMDs during this time? They are going to have it rough. Also, you can’t dump 401k stocks – you’ve gotta hold onto them or switch funds which could possibly / probably only hurt you in the long run.
This large period of uncertainty is unnecessary unless we come out of it going gangbusters and get rich – we’ll see… It’s just going to hurt a lot of people’s retirement down the road the longer this goes on. This is self-induced pain.
the market has irrationally doubled in a few years. if someone moved their retirement date forward because of these bubble pricing, that’s on them
The S&P needs to drop about another 50% from here to ~2800 to get back on the long term trend. Sounds painful but unfortunately valuations have been extreme for over ten years and it’s time for a reset.
Be careful what you ask for. The last time there was a reset, the banks came close to collapsing. I do not think there will be a bailout this time around. Be wary of where you keep your money.
@Harrold: There cannot not be a bailout. The major banks are too big to fail and they are all interlinked.
Feds will bail out the banks, as they always do. Every other financial services company is at risk, especially insurance and brokerages (although brokerages have something called SIPC, as long as it does not go bankrupt). As for insurance companies, as I recall, the Fed bailed out AIG back in 2008. If you use a broker, it might be prudent to keep your cash (settlement) account close to zero dollars. Take screenshots of all your holdings. If you own Treasuries through your broker, you will be okay as long as you have the CUSIP number.
MW: Stocks on track for worst day since 2022 as Trump’s ‘liberation day’ tariffs roil markets
Rivals 1630s Amsterdam.
1630s Amsterdam didn’t have Fartcoin, the only true store of value left in this world.
Nah. Not a lending and mortgage crisis, but a slow unwind of absurd overpriced stock markets. Think 2000-2003. I was there.
Stocks are 93% owned by the top 10%. Among them, the top 1% own 50% and the other 9% own 43%. The bottom 90% can sell their 7% and move to bonds and wait until valuations make sense again.
And yes – Treasury direct. It’s just between me and Uncle Sam.
exactly. the greatest scam in recent history is that the media and everyone else has convinced the bottom 7% that the stock markets need to be bailed out to protect the common man.
Kinda found answer to my own question…
“Newsmax has a small “float,” or shares available for trading. Less than 6% of Newsmax shares, or 7.5 million shares out of a total of 128 million fully diluted shares, are available for public trading.”
When only about 6% of all shares are even capable of being traded, tossing around “market capitalization” figures (using the full 128 million shares) is going to be pretty darn misleading/capable of manipulation.
If even a handful of those *other* 94% percent of shares try to sell, of course the price is going to collapse.
Newsmax isn’t alone in this – a ton of IPOs only float 15%-25% of all possible shares outstanding – so the “market cap” figure has become more and more misleading/capable of manipulation.
That’s ALWAYS the case with IPOs.
Yep…but I tend to think it has gotten worse and worse with time.
And it isn’t like it is terribly hard for the business press to explain that particular dynamic. And educating the public is the first step to reining in the mis-valuation excesses and abuses.
The problem, as is frequently the case in all sorts of modern US markets, is that economic incentives are pretty asymmetrically available…oceans of money to be made by shameless hustling empty hype and often not even an avenue to profit from…exposing it.
I don’t even know that idiot IPOs can be shorted…the legal rules may not allow it and/or the necessary borrowable shares may simply not be allowed to be available.
Another catchy phrase for today’s market meltdown is ‘Trumpenatein Thursday’. A day that Marketwatch says wiped out as much as $2.5 Trlillion in stock market value.
A day that will live in Trumpfamy, make that infamy.
Must be bad. Fox News has removed the ticker from its broadcast that shows the Dow Jones Industrial Average.
Maybe if you don’t know about it, it won’t hurt you ? ?
Oh no, Wall Street isn’t the primary focus anymore after forty years.
yesterday was a 4% drop ( no big deal ) ; 1987 mkt crash was a drop of about 23% in one day ( 508 points ) ; now, that was a drop !
Yes, people forget what real drops are. Or they weren’t around to see them. We had several 10% drops in March 2020. The entire Nasdaq Composite fell by 78% during the Dotcom bust, with thousands of stocks going to zero to never be seen again.
Pity no options on this stock…
The interesting thing about Newsmax IPO is that it was REG-A. So the people that love Newsmax were able to buy the stock. By allowing rank and file people to buy in and skipping the Wall Street firms they saved millions in fees and warrants and all that bullshit. This was not a SPAC or some other form of Wall Street pump and dump. I personally would not touch it, but people that love Newsmax made a fortune. I think this is the real news on this stock.