Many factors can cause a stock to surge following its IPO. However, one catalyst tends to drive its long-term performance: profitability. A company needs to make money to support its operations and growth over the long term. If a company continues to lose money, its stock will likely lose value.

Newsmax, a conservative media company, became a meme stock after its IPO skyrocketed by 2,190%, bringing its market valuation to over $20 billion.

Newsmax (NMAX) stock dropped roughly 68% Wednesday afternoon, partially reversing a massive post-IPO surge that saw shares soar from $14 to $233. The stock's spiral sent Newsmax's market cap down to $6.