Shares of Newsmax (NMAX) jumped more than 15% yesterday after the cable network settled its long-running lawsuit with Dominion Voting Systems. Newsmax agreed to pay $67 million in three installments over three fiscal years, with the payments expected to be funded through revenues. Investors welcomed the news, seeing it as a step that reduces legal uncertainty while removing the risk of a costly and potentially damaging trial.
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In 2021, Dominion filed the defamation lawsuit, initially seeking $1.6 billion in damages. The company alleged that Newsmax aired false claims from Trump allies suggesting voting machine companies rigged the 2020 U.S. presidential election. In its defense, Newsmax argued that “it was critically important for the American people to hear both sides of the election disputes that arose in 2020” and stood by its fair and balanced coverage of the event.
Why Did Newsmax Stock Surge?
This is not Newsmax’s first legal settlement. Earlier, the company settled a $40 million defamation case with another voting machine company, Smartmatic, which also accused it of spreading misinformation. These settlements help Newsmax avoid high-stakes court trials.
Newsmax went public earlier this year, and avoiding such trials could be in the best interest of its shareholders and help the company move forward with renewed focus. Since debuting on March 31, 2025, NMAX shares had fallen 94% prior to Monday’s rally.
Notably, Newsmax did not accept any wrongdoing and has been arguing in court that its reports over the 2020 election were based on “newsworthy events” and protected by the First Amendment. However, earlier this year, a Delaware judge ruled that the network did broadcast false and defamatory statements about Dominion.
Dominion has pursued similar defamation cases against other media outlets. In April 2023, Fox News (FOXA) agreed to pay a staggering $787.5 million to settle its suit. Meanwhile, Dominion’s cases against One America News Network and individual Trump surrogates are still ongoing.
Is NMAX Stock a Buy?
It is indeed too early to comment on Newsmax’s future stock trajectory. So far, only a few analysts have issued recommendations on the stock. However, TipRanks’ Technical Analysis Tool shows a Moderate Buy consensus based on nine Bullish indicators, six Neutral indicators, and three Bearish indicators.
