Quebec's downgrade: S&P wanted a zero deficit in three years rather than five
Quebec Finance Minister Eric Girard responds to the opposition during question period at the Quebec National Assembly, Wednesday, April 23, 2025. (The Canadian Press/Jacques Boissinot) (Jacques Boissinot/The Canadian Press)
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Globe and Mail
26 minutes ago
- Globe and Mail
Newsmax Stock: A Cautionary Tale for IPO Investors?
Initial public offerings (IPOs) can get a lot of attention from the press and investors. This is the first time the public can buy shares in a company, and the share price can move up or down quickly. Newsmax (NYSE: NMAX) completed its IPO at the end of March. In the company's short life as a public company, the share price has been on a wild ride. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » It's good to take a look at the events and glean lessons. Perhaps it can even serve as a cautionary tale for the next flashy IPO that captures people's attention. Ignore the hype Newmax's IPO raised $75 million by selling 7.5 million shares at $10. However, most investors weren't able to purchase shares at that price. On the stock's first day of trading, the share price shot up to close at $83.51. The following day, April Fool's Day, the shares closed at $233. There's no reliable way to predict short-term share price movements, however. Those who feared missing out and jumped in at these elevated prices have seen a massive downslide. The share price closed at $16.19 on June 5. A key lesson is not to buy into a stock's hype merely because the price has gone up a lot. Focus on the fundamentals Granted, it's not easy to ignore the hype and massive price movements. However, the best investing strategy is to look at the business and assess its long-term prospects. A media company, Newsmax generated more than three-quarters of its revenue from its broadcasting business. This includes cable channels and a streaming service that produces news and other content. Newsmax has a history of producing losses, however. Last year, the company lost $72.2 million compared to losses of $30.4 million and $41.8 million in 2022 and 2023, respectively. The wider losses came despite revenue increasing from $35.7 million to $171 million during this time. The company reported first-quarter results in May that showed a $17.2 million loss. Granted, it's heading in the right direction since that's narrower than the $50.7 million loss a year ago. While it's positive to produce revenue gains, profitability is what counts. When looking at newly public companies, ideally, investors should see them operating in the black. That's particularly true for Newsmax given it faces large and well-entrenched competitors. Some basic math Newsmax currently has a $1.5 billion market capitalization. However, when the stock price reached $233, its market cap was about $21 billion. That might not mean much in isolation. But putting the figure into context could send a warning signal. Since the company doesn't report a profit, investors can't use the price-to-earnings (P/E) ratio. However, you can look at price-to-sales (P/S). Newmax's 2024 sales were $171 million in 2024. Dividing the $21 billion market cap by the sales figure equals a P/S multiple of 122 after its second day of trading. The company's revenue grew by 26% in 2024, but that valuation still seems excessive. The shares currently trade at a P/S ratio of 9. The Russell 2000 index, which encompasses small capitalization stocks, typically has a P/S ratio of about 1 to 2. There should be a compelling reason why a stock has a so much higher valuation than the benchmark index. Remember the lessons It's natural to forget about unpleasant experiences. But you need to remember so you can learn and become better-educated investors. The next time you hear about a high-flying IPO, think about Newsmax and whether people are making short-term trades or investing because they believe the company has strong long-term fundamentals. After all, it's wise to think about investing as a marathon rather than a sprint. Should you invest $1,000 in Newsmax right now? Before you buy stock in Newsmax, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Newsmax wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
CBC
31 minutes ago
- CBC
Vancouver apparel company Oak + Fort seeks creditor protection
Social Sharing Canadian apparel brand Oak + Fort says it has obtained creditor protection as it works to restructure its business. The Vancouver-based company says the move is necessary because U.S. tariffs have joined other price pressures and led to a decline in consumer confidence and spending. The tariffs arrived after Oak + Fort pushed to open 26 new Canadian and U.S. stores in the last four years, which the company says resulted in a reduced and ultimately insufficient investment in its e-commerce platforms. Court documents show the company owes more than $25 million to creditors including some landlords who didn't receive May rent payments. Oak + Fort says it will continue to operate stores and an e-commerce business during the restructuring. It was founded in 2010 as an online boutique that eventually expanded to 42 stores in Canada and the U.S. selling womenswear, menswear, accessories, jewelry and home goods. Vancouver-based retail strategist David Ian Gray, founder of DIG360, said that there have been a rolling series of challenges for the retail sector, which has had to deal with high interest rates. "At the very same time, consumer spending has really dampened — and not just for a month or two," he told CBC News. "It's really settled down into a slump. "And there's a big difference between consumers who are buying on need, such as grocery or home improvement household items, versus where they might want to buy some fashion." Gray says the tariffs have added to a "perfect storm" for retailers like Oak + Fort, and others may face similar challenges in the months to come. The strategist said that the company had done a great job engaging shoppers in Vancouver and B.C. over the years. "But like we've seen with so many retailers, sometimes the enthusiasm you see from shoppers in your home market, you forget that might have taken you five or more years to build that up," the analyst said. "And suddenly you need to have the same level in new places ... happening overnight. And so, it's not really a surprise to me that they've had some struggles." Christy Wong, who is from New York, said she was shocked to hear that the retailer was seeking creditor protection, and that many people went to the retailers' outlet in that city.
CTV News
35 minutes ago
- CTV News
Explore Lethbridge app aims to cut through noise when looking for something to do
Tourism Lethbridge has launched the Explore Lethbridge app, to help put the city's tourism offerings into the hands of locals and visitors. Tourism Lethbridge has officially launched its new Explore Lethbridge app. The app is available online, with no download required, at The platform is helping to put the city's diverse tourism offerings into the hands of locals and visitors alike. The app debuts with a curated experience called 'Sip, Taste, Explore' that invites users to discover a mix of culinary hot spots, local attractions and retail shops. Tourism Lethbridge says the app will serve as a hub for everything happening in the city. 'We have so much on our website (and) there's so much on everybody else's websites, so between ourselves, between our partners, between the local businesses, there's so much out there and when you Google what's there to do in Lethbridge, you get a million different things,' said Dominika Wojcik, Tourism Lethbridge senior director of communications. 'What we're trying to do is really curate those experiences for people, so that they can just pull up the app and have everything in one spot and be able to quickly figure out where they want to go.' Tourism Lethbridge worked with the University of Lethbridge to develop the app. The platform will also provide the organization with check-in data to help identify visitor interests and movement patterns throughout the city.
