My friend Carl just pulled off a trade that sounds like a fairy tale – except it’s real, and it’s messy.

Carl’s a Newsmax fanatic, glued to the conservative news channel daily, absorbing every segment like it’s gospel.

When he caught wind of their IPO through on-air commercials, he didn’t just cheer from the couch, he jumped in.

He snagged a pre-IPO deal at a 25% discount off the $10 offering price, locking in over 5,000 shares at $7.50 each with a $40,000 investment.

Last week, Newsmax (NMAX) skyrocketed to $265, ballooning Carl’s stake to a staggering $1.3 million – a 35x return in days.

The fairy tale took a twist, though… Today, the stock’s currently trading around $50, trimming his haul to about $250,000.

Still, that’s a 6x gain on his original bet, which reminds me of Peter Lynch’s classic advice: “Invest in what you know.”

Carl’s Newsmax Bet: From Viewer to Millionaire (Briefly)

Newsmax went public last Monday, raising $75 million at $10 a share.

Carl, thanks to his viewer loyalty, scored early access via a private placement for accredited investors – a perk Newsmax dangled on-air.

The IPO hit, and retail frenzy took over, fueled by Trump’s second term and “meme stock” enthusiasm.

By Tuesday, shares hit $265, a 2,550% leap, briefly valuing Newsmax at $20 billion.

Carl’s $40,000 morphed into $1.3 million. He was texting me screenshots, giddy as a kid on Christmas.

Then gravity kicked in: a 75% drop to $50 by week’s end.

Even so, his $250,000 is a 600% return above his $7.50 cost basis. Not bad for a guy whose investing playbook started with his remote.

Carl’s no quant. He didn’t crunch spreadsheets. He just knew Newsmax cold.

Its 40 million monthly viewers, 309,000 prime-time eyeballs (second only to Fox News among cable news), and pro-Trump tilt were his data points.

He saw the ads, felt the buzz, and bet big. That’s pure Peter Lynch.

Peter Lynch’s Golden Rule

Lynch, the Fidelity Magellan wizard who averaged 29% annual returns from 1977 to 1990, preached a simple truth: you don’t need a PhD to beat the market, just pay attention to what you know.

In One Up on Wall Street, he wrote, “The best stock to buy may be the one you already own – or the one you see every day.”

Spot a hot retailer? A killer gadget? Invest before the pros catch on.

Carl lived this.

Newsmax wasn’t a ticker to him. It was a ritual.

He knew its audience (himself included) and its traction (revenue up 27% to $171 million in 2024).

His 6x win proves Lynch’s point: familiarity can be a superpower.

The Hype Factor: Where Lynch Meets Meme Stocks

Of course, Carl’s peak at $1.3 million wasn’t all Lynch-style genius.

It was a hype rocket.

Newsmax’s “low float” (just 7.5 million shares) lit the fuse.

Small supply, rabid demand, and Trump mania sent it parabolic.

Lynch loved undervalued growers, not lottery tickets.

Newsmax’s fundamentals? Shaky.

It lost $72 million in 2024, up from $41.8 million in 2023, and faces legal headwinds – a $40 million Smartmatic settlement and a $1.6 billion Dominion lawsuit.

Newsmax’s $50 perch today – still a 6x gain – rides more on sentiment than earnings.

Whereas Lynch would’ve grilled the numbers, Carl rode the wave.

Carl’s Win, Lynch’s Wisdom

Carl’s Newsmax jackpot shows Lynch was onto something: what you know can make you rich.

Turning $40,000 into $250,000 – still a 6-bagger – is no fluke. It’s familiarity meeting opportunity.

But that $1.3 million peak and 75% drop? That’s where Lynch’s full gospel kicks in…

Know your stock, not just your screen.

Newsmax’s losses and legal baggage scream caution, yet Carl’s still way ahead.

The lesson?

Start with your gut – your Newsmax, your Costco, your daily grind – then back it with homework.

Carl’s grinning at $55, but Lynch would say: “Nice hit. Now check the fine print. Or at least cash out before the next commercial break.”