Let’s be brutally honest: Newsmax just ran one of the most brazen crowdfunding bait-and-switches in recent memory. They hauled in around $65–$75 million from everyday retail investors under a Regulation A+ “Mini IPO,” dangled the dream of owning a piece of America’s conservative media darling, then shackled those very investors during the single greatest wealth event in the company’s history.
And now? They’ve just agreed to cough up $67 million to Dominion Voting Systems to settle a defamation lawsuit. Meanwhile, the very investors who bankrolled Newsmax are left holding the bag.
The Setup: $10 Shares for the Masses
Back in March 2025, Newsmax launched its SEC-qualified Reg A+ raise. The terms looked tailor-made for Main Street: Class B common stock at $10 per share, minimum buy-in $500. The pitch was clear: join us, own a stake, ride the rocket ship.
Retail investors bit, wiring $65- $75 million. But buried in the circular was the poison pill: a six-month lock-up clause. Unless Digital Offering (the lead selling agent) granted an exception, investors couldn’t sell, hedge, or transfer a single share for half a year.
“Lock-up Except as described below, our officers, directors and certain of our stockholders have agreed, or will agree, with Digital Offering, subject to certain exceptions, that, without the prior written consent of Digital Offering, they will not, directly or indirectly, during the period of six months following the closing of this Offering, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Common Stock or any securities convertible into or exchangeable or exercisable for shares of Common Stock, whether now owned or hereafter acquired by them or with respect to which they have or hereafter acquire the power of disposition; or enter into any swap or any other agreement or any transaction that transfers, in whole or in part, the economic consequence of ownership of the Common Stock, whether any such swap or transaction is to be settled by delivery of the Common Stock or other securities, in cash or otherwise.” SEC EDGAR
The IPO Fireworks That Retail Missed
On March 31, 2025, Newsmax debuted on the NYSE under ticker NMAX. What followed was pure market insanity:
- IPO Offering Price: $10
- Opening Trade: $14
- Intraday High (Day 2): $265
That’s a 2,550% moonshot in less than 48 hours. The kind of return most investors will never see in their lifetimes.
Except Reg A+ investors were chained to their seats, watching speculators, day traders, and hedge funds gorge on the upside. By Day 3, the stock cratered 77% off its peak. By the time the lock-up lifts in September, retail investors will likely be left with scraps. Today, the share price hovers around the $12 mark.
The Underwriters and the Gravy Train
Who helped Newsmax pull this off?
- Digital Offering, LLC, a boutique Laguna Beach investment bank with just six full-time bankers, acted as lead selling agent. Their payday? A 6.265% cash commission on gross proceeds. That’s roughly $4.7 million, plus a warrant to purchase 900 shares of Series B Preferred Stock at $5,000 each. That equity kicker is locked up for 180 days, but make no mistake: they got stock upside as part of their deal.
- DealMaker Securities LLC, the platform most retail investors actually interacted with, served as participating broker-dealer and escrow processor. They didn’t get stock, but they pocketed a re-allowance of the commission funneled from Digital Offering.
So let’s be crystal clear: the bankers got paid in cash and equity. The platform got paid in commission. The company got its $75M. And retail? Retail got a gag order.
The Screwjob in Plain English
Lock-ups are supposed to stabilize markets. Here, they became a blunt weapon.
- Retail investors: took the biggest risk, were locked out of selling.
- Wall Street traders: flipped shares for 20x+ gains.
- Digital Offering & DealMaker: got their fees and warrants.
- Newsmax: banked the cash, then turned around and earmarked $67 million for a defamation settlement.
It’s like investing in a restaurant, only to be locked outside while scalpers resell your meal for 20x the price. When you’re finally let in, the kitchen’s on fire.
Crowdfunding Was Supposed to Protect Retail
The JOBS Act and Reg A+ were sold as tools to level the playing field. Everyday investors would finally get access to deals once reserved for elites.
But Newsmax flipped the model:
- They milked retail for liquidity.
- They imposed insider-style lock-ups on outsiders.
- They rewarded bankers and platforms with fat commissions and equity warrants.
- And they used retail’s cash to plug legal liabilities.
This is in no way financial inclusion. It’s financial extraction.
A lesson in how not to do it.
Newsmax’s Reg A+ raise should go down as a case study in how not to treat your investors.
Retail didn’t get a seat at the table. They got turned into cannon fodder for a payday that insiders and traders devoured in days. Meanwhile, Digital Offering and DealMaker walked away with millions in fees and stock perks — the very things retail investors were denied.
If you bought into Newsmax’s Reg A+ deal, you didn’t get a piece of media glory. You bought a six-month gag order on your own money.
This isn’t patriotism either. It’s financial mugging dressed up in a flag.
And the next time you see a Reg A+ deal with a lock-up clause? Treat it like chicken that’s been sitting in the sun all day: don’t touch it, don’t eat it, and for God’s sake, don’t invest in it.
