Dave Portnoy, founder of Barstool Sports, announced in a video earlier Tuesday morning that he has partnered with Vaneck Vectors to launch an ETF (Exchange Traded Fund) this Thursday on the NYSE under the ticker symbol BUZZ. Using an AI (Artificial Intelligence) algorithm, the Buzz Index will monitor roughly 15 million posts on social media every month.
The ETF will hold positions in the top 75 stocks trending throughout social media that will “rotate” by the month. Each company the Buzz Index holds a position in will be required to have a market cap of at least USD 5 billion. After shares of companies such as Gamestop (NYSE: GME) and AMC Entertainment (NYSE: AMC) soared in value because of a Reddit fueled short squeeze, it became clear that in today’s day and age, social media can drive up the value of stocks.
While this perhaps has created a new dynamic in today’s market, it is nearly impossible to predict if and when stocks such as these will trend on platforms such as Reddit or Twitter. “If you don’t adapt you die. Twitter, social media, all of it, is dictating the price of stocks”, Portnoy stated. The goal of BUZZ ETF will be to capture the buzz around “meme stocks” as they begin to trend on social media. The Buzz Index algorithm was created just over 5 years ago in 2015, and Dave Portnoy claims that it has beaten the S&P 100 index by as much as 40%.