If you’ve been paying attention to the markets lately, it’s been impossible to miss the wild price action in Newsmax (NMAX) and CoreWeave (CRWV).
If you did miss them — sign up for my no-cost weekly watchlist here!
One’s a meme stock rocketship tied to politics. The other’s an AI-fueled infrastructure name with big-name backers like Nvidia and OpenAI. Both just went public. And both show exactly why trading IPOs — especially on day one — is one of the most dangerous games newer traders can play.
Let’s break down what happened, what it means, and how smart traders approach these kinds of setups.
NMAX: Meme Stock Mania at Full Blast
Newsmax’s IPO was about as wild as they come. It opened at $10 and ripped to $279 within two days — a 2,200% move that briefly valued the company above Fox Corporation.
But it didn’t last.
By day three, shares had collapsed 77%, giving up nearly all of those gains.
Check out the latest Newsmax news here!
What caused the spike? A combination of low float, high retail demand, and political enthusiasm tied to Trump’s return. The stock was sold under a Regulation A offering — a retail-focused route that skips the traditional underwriter process. Only 7.5 million shares were floated initially, which created a perfect storm for volatility.
The result: a classic meme stock setup — massive early hype, limited liquidity, and a brutal rug pull when the momentum dried up.
CRWV: AI Hype Meets a Risky Balance Sheet
CoreWeave’s IPO told a different story, but it’s just as instructive. Backed by Nvidia and built on the booming demand for AI compute infrastructure, CRWV priced below range and traded flat out of the gate. But within days, it spiked more than 60%.
Then it fell 20%.
There’s a compelling narrative here. AI is hot, and CoreWeave’s revenue growth has been explosive — up over 700% in 2024. But like many high-growth tech plays, the company is burning cash at a staggering rate, with a net loss north of $860 million last year.
It’s a pattern we’ve seen before. Early excitement, strong narrative, and then the market starts asking real questions about sustainability.
And if that reminds you of the SPAC boom from a few years back … it should.
More Breaking News
- From Underdog to Top Performer: American Rebel’s Surprising Surge
- D.R. Horton: Is It the Moment to Buy?
- Nike Stock: A Volatile Turn Ahead?
Get the complete rundown on CoreWeave on my Robinhood Penny Stock watchlist!
Market Conditions Are Shifting — And So Is IPO Timing
It’s not just the volatility in names like NMAX and CRWV that’s shaping the IPO landscape — the broader market environment is playing a huge role in how and when companies are choosing to go public.
Take Klarna. The Swedish fintech giant was lined up to be one of the biggest IPOs of 2025. It had filed its paperwork, picked its ticker (KLAR), and was reportedly days away from launching its roadshow. But then — just like that — Klarna hit pause.
StubHub followed suit. The online ticket marketplace had plans to go public under the ticker STUB and was set to begin marketing to investors this week. That’s also off the table now.
So what happened?
One word: uncertainty.
President Trump’s sweeping tariff announcement sent shockwaves through global markets. The Nasdaq is on pace for its worst week since the 2020 COVID panic. Tech names — especially growth and consumer-facing stocks — have been getting crushed. Klarna specifically cited tariff and trade-related risks in its prospectus, pointing to slower consumer spending and increased friction for merchants as key concerns.
But it’s not just macro headlines. It’s also recent IPO price action. CoreWeave’s IPO technically got out the door — but it had to slash its offering price just to make that happen. And while it saw a pop initially, the stock’s been incredibly volatile ever since. Klarna’s own peer Affirm is down more than 40% year-to-date. That’s not exactly the backdrop you want heading into a billion-dollar debut.
This tells us a lot about where the market is right now. Institutions aren’t chasing risk. They’re being selective. Even retail enthusiasm — which fueled wild pops like NMAX — is proving short-lived. Hype might get you a headline, but without support, you’re setting up for a hard fade.
The Problem With Trading IPOs
This is the part most traders get wrong. It’s not that IPOs can’t be traded — they absolutely can. But they require patience and a plan. Most people skip both.
Day one of any IPO is a gamble. There’s no chart history. No support. No resistance. No pattern to work with. You’re just guessing.
You might win on a lucky move. But that kind of trading reinforces bad behavior, and in this game, bad habits are expensive.
What we look for instead is a chart to develop. Let the stock trade for a few days. Let the IPO price and key levels establish themselves. Then, and only then, do we start building the case for a real trade.
That might mean watching the stock for three days. It might mean waiting a week. Whatever the timeline, the key is simple: don’t trade the unknown. Wait for the setup.
The Smart Way to Trade IPOs
Here’s the approach I’ve taught for years:
- Watch the IPO from day one — but don’t trade it. Use this time to observe volume, sentiment, and overall price action.
- Let the chart develop. Typically, day two is a red day as the hype fades and reality sets in.
- Look for a clean breakout of the IPO open price. That’s often the first technical level with real meaning. When that level breaks with volume — and there’s still momentum behind the name — that’s your potential trade.
- Use tight risk/reward. These stocks move fast. If you’re wrong, you need to be out fast. No hesitation.
This is a simple framework, but it works. It’s how we avoided the collapse in NMAX. It’s how we’ll handle CRWV if it sets up for a second leg. And it’s how I’ve approached IPOs for over a decade — whether it’s BYND, HOOD, ROKU, or anything else that comes out swinging.
Final Thoughts
Don’t chase the hype. Don’t confuse price action with a plan. IPOs will always be tempting — especially when they’re in the headlines and everyone’s talking about them.
This is a market tailor-made for traders who are prepared. IPO stocks thrive on volatility, but it’s up to you to capitalize on it. Stick to your plan, manage your risk, and don’t let FOMO drive your decisions.
These opportunities are fast and unpredictable, but with the right strategy, you can make them work for you.
If you want to know what I’m looking for—check out my free webinar here!