**Just in:** Newsmax has registered to sell up to **25,633,636 shares** (worth \~$668 million at current prices) to Yorkville Advisors at around **$26 per share**. This is part of what’s called a **Standby Equity Purchase Agreement**, or SEPA.
[SEC Filing dated 16 April 2025](https://www.sec.gov/Archives/edgar/data/2026478/000121390025032602/ea0237903-s1_newsmax.htm)
[SEC Filing dated 16 April of $NMAX tapping into SEPA](https://preview.redd.it/lkn949kfocve1.png?width=2992&format=png&auto=webp&s=d2fa87fc003586a0fdca00ccaf91f6615660ec1a)
*Reposting as previous post was deleted for not containing receipts & positions.*
**What’s a SEPA?**
Think of it like a credit line, but instead of borrowing money and paying it back, the company prints new shares and sells them for cash. Yorkville agrees to buy those shares, usually at a discount, in this case, around **3.25% off market price**.
Once Yorkville gets the shares, they usually **sell them into the market immediately**. So it’s not a loan. It’s basically dilution-on-demand. The company raises cash, but it **dilutes existing shareholders** because there are now more shares in circulation.
It’s like the company saying, “We’re not broke… but we might be. So we’re gonna start printing shares and offloading them to someone who’s definitely gonna sell them right away.”
This filing comes **right after Newsmax’s IPO and $300 million raised from preferential shares**, so it raises the question: why raise even more?
Answer: probably **legal risk**. Newsmax is facing a **$1.6 billion lawsuit from Dominion**, the same group that sued Fox News. Fox was sued for $2.96 billion and settled for $797.5 million. If you use that as a benchmark (around 25%), Newsmax could be looking at a settlement or judgment minimally in the **$400 million range**, give or take.
That would wipe out a good chunk of their balance sheet. Hence, this SEPA might be a backup plan or the primary plan. But the price of this move is heavy dilution. Newsmax currently has **88.9 million shares outstanding**. If they issue all 25.6 million to Yorkville, that’s a **28.8% dilution**. And with only **7.5 million shares** are in the public float right now, this could put real pressure on the stock if Yorkville starts offloading shares into a low-float environment.
Courtesy of ChatGPT, sharing some examples of companies that got destroyed after SEPA (usually also because SEPA is a last-line of defence they tap into so it also implies deep-rooted issues):
|**Company**|**SEPA Partner**|**Result**|**Share Price Trend**|
|:-|:-|:-|:-|
|||||
|$MULN|Yorkville|Extreme dilution, < $0.01|↓ 99%+ from 2022|
|$BBIG|Yorkville|Heavy dilution, meme spike failed|↓ from $4 to <$0.05|
|$IDEX|Yorkville|Used SEPA often, no real turnaround|↓ from \~$3 to <$0.10|
|$GNS|Yorkville|Meme interest fizzled post-SEPA|Brief spike → sustained decline|
|Zosano Pharma|Lincoln Park|Delisted and bankrupt|SEPA couldn’t save it|
**My positions**:
Bought 60 puts at 22.5 strike expiring May 16 '25
https://preview.redd.it/mhxtfwvk0dve1.png?width=580&format=png&auto=webp&s=dfa93f418acec14c1236f0ba80a87543a48911c0
**TLDR:**
* **Newsmax can sell up to 25.6 million shares** to Yorkville at a discount under a SEPA
* Could raise \~$668 million but at the cost of **\~29% dilution**
* This comes as they face a **$1.6B lawsuit from Dominion**
* Only **7.5 million shares** are publicly traded. This move will pump the public float supply up to **4.4x more**.
* Not a loan; this is just straight-up share printing. It is **essentially crowdsourcing litigation monies from their shareholders who end up footing the bill**.
This one might get wild.