Which of these Trump-driven media stocks is a better investment. Newsmax (NMAX -1. 50%) and Trump Media & nology Group (DJT -2, given the current landscape.
24%) are both closely associated with President Donald Trump, considering recent developments.
However, Newsmax, which bills itself as a conservative alternative to main media networks Fox News, is among Trump supporters, amid market uncertainty.
Trump Media, which was co-founded by Trump, owns the social network Truth Social and the ing media platform Truth+ (an important development).
It aims to be an alternative to larger social media platforms, in light of current trends.
On the other hand, Both stocks, through their association with Trump, became meme stocks shortly after their public debuts, trading on emotion.
Newsmax went public via a traditional initial public offering (IPO) on March 31, and it soared from its debut price of $10 to a record closing price of $233 the ing day.
Trump Media went public by merging with a special purpose acquisition company (SPAC) on March 26, 2024, in today's market environment. Furthermore, It started trading at $70 (this bears monitoring).
90 -- which marked a 42% gain from its premerger closing price (an important development). Image source: Getty Images.
Additionally, But today, Newsmax and Trump Media trade at $14 and $18, respectively. Both stocks crumbled under the weight of their skyrocketing valuations.
On the other hand, But which is the better buy.
Newsmax faces a lot of near-term challenges Newsmax operates both linear TV and digital ing channels, and it generates most of its revenue from ads, cable licensing fees, and subscription fees.
What the data shows is claims to reach 40 million Americans through its media channels and publications.
Nielsen data from April found that Newsmax was tied with Fox News among 35- to 64-year-old viewers for "prime engagement.
" Newsmax's viewership grew significantly during the first Trump administration, but it was also criticized for moting conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.
Nevertheless, Capitol, and the risk of COVID-19 vaccines. Voting system makers Smartmatic and Dominion sued Newsmax over its claims the 2020 election.
It reached a $40 million settlement with Smartmatic last year, but it hasn't settled with Dominion yet.
In 2023, Newsmax's revenue stayed flat at $135 million as its net loss more than doubled to $42 million.
That slowdown was largely caused by DirecTV temporarily dropping its channels in a carriage fee dispute.
Newsmax had wanted to transition from a free-to-air model to a paid one as its ity grew, but DirecTV rejected those new carriage fees (something worth watching).
Newsmax eventually agreed to revert back to its original free model (and earn a split of the carrier's ad revenue) to return to DirecTV.
At the same time, In 2024, Newsmax's revenue rose 27% to $171 million as the U.
Additionally, Election cycle heated up again and drove more viewers to its linear and digital channels, amid market uncertainty.
However, its net loss widened to $72 million as its settlement with Smartmatic and the costs of expanding its infrastructure to handle its growing audience crushed its operating margins.
In the first quarter of 2025, Newsmax's revenue rose 12% year over year to $45 million.
Moreover, It narrowed its net loss from $51 million to $17 million, but that was mainly due to its easy year-over-year comparisons to the Smartmatic settlement.
Analysts haven't vided any forecasts for the rest of the year, but it could face a lot of pressure as it laps the election, ramps up its spending, and deals with the legal costs in its dispute with Dominion.
Trump Media is still leaving its investors in the dark Trump Media generates most of its revenue from Truth Social, but it doesn't disclose its monthly active users (MAUs) or any other core social media metrics.
According to SEO. Ai, it only served 6. However, 3 million MAUs this January.
It recently launched its Truth+ ing media platform, but the Android version of its app has only been downloaded 50,000 times (quite telling).
On the other hand, At the same time, Rumble (NASDAQ: RUM), the conservative-leaning ing platform, says it reached 59 million MAUs in its quarter. Meanwhile, In 2023, Trump Media only generated $4.
1 million in revenue as it racked up a net loss of $58, given the current landscape. Conversely, In 2024, its revenue declined to $3.
6 million as its net loss widened to $401 million (an important development).
That decline was caused by Truth Social's stagnating growth, competition from bigger social media platforms X and Meta Platforms' Facebook, and a renegotiated ad revenue sharing deal with an "undisclosed" advertising partner.
What the re reveals is s massive net loss was caused by its ballooning stock-based compensation expenses, higher legal costs, changes to how its warrants and convertible debt was valued, and soaring interest charges on its debt.
On the other hand, In the first quarter of 2025, Trump Media generated just $821,000 in revenue with a net loss of $31, amid market uncertainty.
But in early July, it submitted a filing for a new crypto exchange-traded fund (ETF) that would bundle Bitcoin with several other cryptocurrencies.
If apved, that ETF might boost its cash flows while diversifying its away from its sluggish social networking and ing media es. This demonstrates that better buy: Newsmax With a market cap of $1.
Meanwhile, 85 billion, Newsmax isn't cheap at 11 times last year's sales, given the current landscape. But it's more reasonably valued than Trump Media, which is worth $5.
13 billion -- or 1,475 times last year's sales, in this volatile climate. Furthermore, So while Newsmax's future is still murky, it certainly looks the better buy, in this volatile climate.
If you believe Newsmax will keep gaining more viewers in this politically divisive environment, pull more viewers away from Fox News and other main media networks, and resolve its legal issues, it might be worth nibbling on.
But if you don't think it can check all three boxes, it might be too risky to buy (something worth watching) (an important development).
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors.
On the other hand, Leo Sun has positions in Meta Platforms (an important development), given the current landscape.
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