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Stock-Split Watch: Is Newsmax (NMAX) Next? | The Motley Fool

Stock-Split Watch: Is Newsmax (NMAX) the Next Big Split Candidate?

In the ever-evolving world of stock market investments, few events capture the imagination of retail investors quite like a stock split. These corporate actions, where a company divides its existing shares into multiple ones, often signal confidence in future growth and can make shares more accessible to a broader audience. Recently, the spotlight has turned to Newsmax Media, trading under the ticker NMAX, as speculation mounts about whether it could be the next company to announce a split. With its stock price soaring amid a surge in media consumption and political news cycles, investors are buzzing with anticipation. But is there real substance behind the hype? Let's dive deep into the factors at play, examining Newsmax's performance, market context, and the broader trends in stock splits to assess if NMAX is indeed poised for this move.

First, a quick primer on stock splits for those new to the game. A stock split doesn't change the overall value of a company—it's essentially like cutting a pizza into more slices without adding more toppings. For instance, in a 2-for-1 split, if you own one share worth $100, you end up with two shares worth $50 each. The appeal lies in psychology and liquidity: lower per-share prices can attract more investors, especially retail traders who might shy away from high-priced stocks. Tech giants like Apple and Tesla have famously split their stocks multiple times, often leading to short-term price pops as excitement builds. More recently, we've seen splits from companies like NVIDIA, which executed a 10-for-1 split in 2024 after its shares skyrocketed on AI hype, and Walmart, which went 3-for-1 to make employee stock purchases more affordable.

Newsmax, a conservative-leaning media outlet known for its cable news channel, streaming services, and online publications, has been on a remarkable run. Founded in 1998 by Christopher Ruddy, the company has positioned itself as a key player in the alternative media landscape, especially during election years when political discourse drives viewership. Its stock, listed on the NASDAQ under NMAX, has seen explosive growth. As of mid-2025, shares are trading around $450, up more than 300% from early 2024 levels. This surge is fueled by several catalysts: a boom in digital subscriptions amid cord-cutting trends, strategic partnerships with streaming platforms, and heightened interest in news during a contentious U.S. presidential election cycle. Revenue reports from the first half of 2025 show a 45% year-over-year increase, driven by advertising dollars from political campaigns and a growing international audience.

But why the stock split chatter specifically for NMAX? The primary trigger is the share price itself. Historically, companies tend to consider splits when their stock exceeds $300-$500 per share, as this can deter smaller investors. Newsmax's current valuation puts it squarely in that territory. Analysts point to precedents like Fox Corporation (FOXA), which has flirted with high share prices but hasn't split, or even Disney (DIS), which last split in 1998. However, Newsmax's rapid ascent mirrors that of high-flying tech stocks more than traditional media peers. In a recent earnings call, CEO Christopher Ruddy hinted at "measures to enhance shareholder accessibility," which many interpreted as code for a potential split. This isn't mere speculation; insider buying has picked up, with executives snapping up shares in the open market, signaling confidence.

To understand the likelihood, we must look at the broader market environment. The year 2025 has been a banner one for stock splits, with at least a dozen major companies announcing them. Chipotle Mexican Grill (CMG) executed a 50-for-1 split in June 2025, citing the need to make shares more affordable after hitting $3,000 pre-split. Similarly, Broadcom (AVGO) followed suit with a 10-for-1 move, capitalizing on its AI-driven rally. These actions have created a ripple effect, encouraging other firms to follow to maintain investor interest. In the media sector, splits are rarer, but not unheard of—think of the old Viacom splits before its mergers. For Newsmax, a split could be a strategic play to boost liquidity, especially as it eyes expansion into new markets like podcasts and social media integrations.

Delving deeper into Newsmax's financials provides more clues. The company's market capitalization has ballooned to over $15 billion, reflecting its transformation from a niche news site to a multimedia powerhouse. Earnings per share (EPS) for the latest quarter came in at $2.15, beating estimates by 20%, thanks to cost efficiencies in content production and a surge in ad revenue from election-related spending. Debt levels are manageable, with a debt-to-equity ratio of 0.4, giving management flexibility for shareholder-friendly moves. Moreover, Newsmax has been aggressive in share buybacks, repurchasing $500 million worth in the past year, which has helped prop up the stock price. A split could complement this by drawing in more retail investors via platforms like Robinhood, where low-priced stocks often see higher trading volumes.

Critics, however, argue that a split might be premature. Some Wall Street analysts, including those from firms like Goldman Sachs, have rated NMAX as a "hold" rather than a "buy," citing vulnerabilities in the media industry. Advertising revenue can be cyclical, heavily dependent on political events, and competition from giants like Fox News and emerging players like OANN could erode market share. If a recession hits or if election fervor dies down post-2024 (wait, we're in 2025—assuming ongoing cycles), Newsmax's growth could stall. Furthermore, stock splits don't always lead to sustained gains; research from the CFA Institute shows that while there's often a pre-announcement bump, long-term performance depends on fundamentals, not the split itself.

On the bullish side, proponents highlight Newsmax's innovative edge. The company has invested heavily in AI-driven content personalization, allowing users to receive tailored news feeds, which has boosted engagement metrics by 60% year-over-year. Partnerships with tech firms for data analytics and even ventures into e-commerce (selling branded merchandise) diversify revenue streams beyond traditional ads. If Newsmax announces a split, it could be timed with its next earnings report in August 2025, potentially amplifying positive news. Imagine a 4-for-1 split bringing the share price down to around $112.50—this could ignite a buying frenzy, especially among conservative-leaning investors who view NMAX as both a financial and ideological bet.

Investor sentiment, as gauged by forums like Reddit's r/WallStreetBets and StockTwits, is overwhelmingly positive. Threads are filled with memes comparing Newsmax to Tesla's pre-split days, with users predicting a "moonshot" post-split. Institutional ownership is also rising, with hedge funds like BlackRock increasing stakes, which adds credibility to the split narrative.

In comparison to peers, Newsmax stands out. While legacy media like CNN's parent Warner Bros. Discovery (WBD) struggles with declining cable viewership, Newsmax's digital-first approach has it outperforming. Its price-to-earnings (P/E) ratio of 35 is high but justified by growth prospects, similar to Netflix in its heyday before multiple splits.

Ultimately, whether Newsmax pulls the trigger on a stock split boils down to strategic timing. If the board believes it will enhance visibility and attract capital for further expansion—perhaps acquiring smaller media outlets or launching in new languages—a split makes sense. For investors, the key is to focus on fundamentals: Is Newsmax's growth sustainable? With streaming wars heating up and political polarization unlikely to fade, the answer seems affirmative.

In conclusion, while no official announcement has been made, the stars are aligning for NMAX to join the stock-split club. Investors should watch for signals in upcoming filings or conferences. If it happens, it could mark a pivotal moment for this media upstart, potentially rewarding patient shareholders handsomely. As always in investing, due diligence is paramount—splits are exciting, but they're not a guarantee of riches. Stay tuned; the next chapter in Newsmax's story could be a split-second decision away.

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