• Conservative television network Newsmax has seen its stock skyrocket since going public on Monday.
• The investment bank that handled the public offering is a little-known firm called Digital Offering.
• A Digital Offering exec explains how the firm won the deal.

Newmax's stock debut may be the talk of Wall Street, but the investment bank behind the deal is not normally associated with the sector's splashiest IPOs.

Rather than using a large advisory firm like Goldman Sachs or Morgan Stanley, Newsmax tapped a relatively obscure advisor: Laguna Beach, California-based Digital Offering LLC, which has just six full-time registered bankers. The stock debut has helped put the bank on the map and is already driving new business to the firm, said Mark Elenowitz, a managing director at the firm, based in New York.

"It's huge for us," Elenowitz told Business Insider in an interview. "The small-cap community knows who we are, but the rest of Wall Street didn't."

Digital Offering advises companies valued at $1 billion or less — what's considered small potatoes for some bulge-bracket shops. The bank also specializes in the unconventional method Newsmax used to sell its stock to the public for the first time.

Rather than hire a bunch of banks to underwrite the IPO and sell the stocks to large investors in a roadshow, Newsmax relied on a lower-cost, less onerous form of a public offering termed Regulation A+, a provision of the Jumpstart Our Business Startups Act, which President Barack Obama signed into law in 2012.

The conservative news station raised $75 million selling 7.5 million shares at $10 each through this process, sometimes called the "mini IPO." Despite Newsmax losing $72 million in 2024, the stock shot up 735% on its first day of trading and another 180% on Tuesday to close up over 1,200% for the week at $233.

It could lead to a surge in demand for this type of offering and more business for firms like Digital Offering. Elenowitz said some mid-cap investment bank advisory firms have already reached out in recent days to express their desire to partner on public offerings structured similarly to Newsmax.

"They want us to help them," he said of this type of stock offering.

Working with Newsmax

The bank's relationship with Newsmax began in August 2023, Elenowitz recounted. At first, Digital Offering helped Newsmax raise $225 million in capital from accredited investors.

Newsmax wasn't aware of the Regulation A+ method for taking a company public, and Digital Offering was able to enumerate its vision. "We felt that it would really create visibility for the company beyond just raising money, but actually creating visibility for the brand," he said.

Elenowitz spearheaded the Newsmax transaction alongside Gordon McBean, the bank's cofounder and chairman and a veteran of Lehman Brothers and Wells Fargo; and Mike Boswell, an MD who also has business interests in the defense sector and blockchain technology.

Digital Offering saw Newsmax as the right candidate for a Regulation A+ offering because of its consumer appeal. Whereas a traditional IPO prioritizes large institutional investors, a Reg A offering lets companies raise money from accredited and non-accredited investors, including mom-and-pop retail investors.

"Instead of buying, as an institution, a million dollars and really being concerned, these are investors that are buying $500, $1000" worth of equity, "which gives management the time to stop worrying about their stock price and focus on growth their business."

The past 48 hours have been a rush for Elenowitz. The phones have been ringing off the hook, he and his team rejoiced over a celebratory dinner, and he and his wife are departing to Paris this weekend.

He said the highlight was ringing the trading bell at the New York Stock Exchange on Monday. An exchange official handed Elenowitz a sheet of paper shortly after 10:51 a.m. that read, "Opening trade: 244,778 shares at $14."

"That, to me," he said, "was a historic moment."

Reed Alexander is a correspondent at Business Insider. He can be reached via email at [email protected], or SMS/the encrypted app Signal at (561) 247-5758.