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Summary
- BUZZ ETF dropped 3.4 percent in its trading debut on NYSE.
- The Fund has a market cap of US$11 billion and backed by companies like Ford and Twitter.
- The fund’s promoter has hailed BUZZ as an effective tool to track social media stock trends.
VanEck Vectors Social Sentiment ETF (NYSE:BUZZ), the one-stop-shop for social media stocks, dropped 3.4 per cent in its trading debut on the New York Stock Exchange (NYSE) on Thursday.
Backed by Barstool Sports founder Dave Portnoy, BUZZ ETF is among the promising newcomers that are expected to perform well in the coming days, according to analysts.
The fund has a market cap of US$5 billion and managed by VanEck Associates Corp. Buzz ETF focuses on social media trends through an algorithm that can read investor sentiment to target stocks. The fund’s promoter has hailed BUZZ as an effective tool to track social media trending stocks.
The fund plans to take advantage of the growing popularity of internet trade and wants to brand itself as a one-stop-shop for all social media trending stocks. Its algorithm tracks sites like Twitter, Reddit, and StockTwits to measure the pulse before zeroing-in on a particular stock.
Pic Credit: Pixabay
Buzz To Gain From Internet-Savvy Traders
BUZZ ETF follows around 75 stocks on its index, and to make it to that list, each must have a market cap of US$5 billion or above. BUZZ hopes to capitalize from the growing numbers of internet-savvy day traders. BUZZ is backed by companies like Ford, DraftKings, and Twitter.
The unit was priced at US$23.61 per share as of 11:05 a.m. ET.
Stock markets had witnessed high volatility in late January after an investor group, dubbed WallStreetBets, on Reddit forum, collectively bet on selected stocks to drive their prices up. Their actions led the stock prices of GameStop, AMC Entertainment, and others to rise steeply.
The ensuing volatility had caught the attention of regulators, and hedge fund managers which have since devised strategies to watch over the social media groups before they can strike.
