Why did this old media company rise 2200% in just 2 days after going public?

The market frenzy is back! After going public, Newsmax's stock price skyrocketed, and the founder's paper wealth soared to billions of dollars. However, investors should be wary of potential bubble risks behind the loss-making entity. Newsmax, founded by Trump’s friend and right-wing media mogul Christopher Ruddy, saw its stock price surge after going public. On its first trading day, Monday, Newsmax opened at $14 and then skyrocketed, closing with an increase of over 700%. On Tuesday, the stock closed at $233, with a staggering cumulative increase of over 2200% over two days. Notably, Newsmax has been promoting this IPO to viewers on its television programs, with screen slogans encouraging viewers to "Become an owner of NEWSMAX!" Ruddy told readers in an editorial last July: “We want thousands of Americans like you to become co-owners of Newsmax,” guiding them to purchase shares through "NewsmaxInvest.com." Newsmax founder Ruddy holds 39.2 million Class A shares, which, based on the current stock price, are worth up to $9.1 billion. This surge in stock price also brings to mind the "meme stock frenzy" of 2020 to 2021, when stocks like GameStop and AMC surged in the short term driven by retail investor power, far exceeding fundamental valuations. Data shows that in the past five years, only seven new stocks in the U.S. market have seen an increase of over 700% on their first trading day, but these companies subsequently experienced an average stock price pullback of 94%, with peak declines approaching 99%. Signs of a Bubble? Hedge Funds Are Shorting Founded in 1998, Newsmax claims to have over 40 million American viewers and is considered one of the most pro-Trump media outlets in the U.S. The market frenzy is puzzling for a company whose main revenue comes from the long-declining cable television industry. Billionaire Thomas Peterffy is also a major investor and expressed his "shock" at Newsmax's stock price surge: I think Newsmax is a great company with a very bright future, but I don’t think it’s worth this high price. Some hedge funds have begun betting against Newsmax's stock price, borrowing its shares at high interest rates, expecting the stock price to drop rapidly. Some hedge funds believe that as retail investors who participated in the IPO seek to cash in on huge profits, the stock price will decline in the coming days. Moreover, the market capitalization comparison further highlights the unreasonable valuation, with Newsmax's market capitalization reaching $20 billion on Tuesday, close to Fox Corp's $24 billion market cap—but Fox's revenue for fiscal year 2024 is projected to be $14 billion, while Newsmax only has $171 million. This stock price performance, detached from fundamentals, reflects more the sentiment-driven nature of a specific group of investors rather than the company's intrinsic value