'Meme stocks' go mainstream: There’s now a fund for that
NEW YORK (AP) — Interested in trading some of the stocks that have rocked Wall Street recently fueled by social media buzz? Has the craziness of the comments talking up the so-called meme stocks on Reddit and other sites kept you away? Well, the financial industry has something for you.
On Thursday, investment firm VanEck expects to list an exchange-traded fund called the VanEck Vectors Social Sentiment ETF under the ticker symbol “BUZZ.” It will track an index of U.S. stocks getting mentioned often in investment-related posts on social media, news articles and online discussion forums.
Such stocks have forced Wall Street to pay much more attention to what smaller investors are doing, as they communicate with each on the internet and pitch ideas for stocks to pile into. Sometimes the conditions are so ripe for the stock to burst higher that it can soar far past what any analyst could imagine.
GameStop, the financially struggling video-game retailer looking to transform its business, is the poster child for the phenomenon. It surged more than 1,600% in January as an army of smaller-pocketed and novice investors poured in. Some were looking to hurt the hedge funds and other professional investors that had bet GameStop's stock would fall.
BUZZ, though, doesn't include GameStop at the moment. It also doesn't hold another stock that an outsider might consider buzzworthy: Rocket Cos. The company's stock more than doubled in the three days through Tuesday after getting more attention on Reddit's WallStreetBets forum and other social media venues.
The index underlying BUZZ updates what stocks it includes once a month, and they have to meet several criteria. Among them: A stock must have a market value of at least $5 billion, which would preclude some of the smaller companies getting talked up on social media. Its...
