We’ve had a number of inbound questions this week about NewsMax (NMAX) and its eye-catching debut. It’s a good opportunity to clarify how we view deals like this—and why it didn’t trigger action in our models.
Let’s start with the basics. NMAX went public via a Reg A “mini-IPO.” While technically an initial public offering, this format falls outside the scope of what we consider a traditional IPO. The company raised $75 million by offering 7.5 million shares at $10 each, but did so without underwriters. Instead, a boutique investment bank, Digital Offering LLC, served as the lead selling agent. Investors participated directly through a web portal, with minimum investments as low as $5k.
Prior to this, NewsMax completed a $225 million private placement in February to support its capital position.
The Reg A structure offers lower regulatory hurdles and reduced issuance costs, making it attractive to issuers—but it typically comes at the expense of institutional participation and aftermarket stability. These offerings often live in a different category from the marquee IPOs we focus on at IPO Prophet.
We concentrate our research and models on larger, more institutionally-driven transactions—deals with significant size, top-tier underwriters, and companies with a more established pedigree. NMAX didn’t meet those criteria, so it wasn’t part of our core tradeable universe. That said, we did run it through our models retroactively.
Our system is built on three signals:
One Bull Signal, issued pre-open, that indicates the potential for upside momentum.
Two Bear Signals, issued intraday, that flag conditions for downside movement.
(More on our signals can be found here.)
On its debut, NMAX opened with volume of approximately 245,000 shares, just shy of the threshold for our Bull Signal. However, if our models were calibrated specifically for a $75M float, the trade would have qualified. Importantly, there were no Bear Signals throughout the session. That combination implies a one-day long trade, which in this case would have captured a 496% return if executed according to signal timing.
Sounds great, right? But here’s where perspective matters.
Mini-IPOs like NMAX can grab attention with dramatic day-one moves—but without institutional sponsorship and float depth, they often fail to sustain those gains. As of this writing, NMAX is trading ~75% below its peak. While the company itself may be promising, the structure and scale of the offering create trading dynamics that don’t align with the repeatable, risk-aware strategies we’re building at IPO Prophet.
If you’re looking for a more telling signal for the IPO market’s health, look no further than CoreWeave. This was a large, high-quality print. Despite early chop, the stock has quickly rebounded and is climbing—demonstrating that size and structure still matter, and that the market can support big deals under the right conditions.
We’ve said it before: large offerings often take time to digest. But when they bounce back quickly, it’s a strong indicator of confidence—and a good omen for what’s coming down the IPO pipeline.
Stay tuned. There’s more to come.