A new ETF launched Thursday hoping to capture social media sentiment and hold the top large-cap names that are mentioned the most.
What Happened: The VanEck Social Sentiment ETF BUZZ launched Thursday and drew strong interest from investors and the media.
Barstool Sports Founder Dave Portnoy promoted the new ETF and is a shareholder in BUZZ Holdings, the parent company of the BUZZ NextGen AI Us Sentiment Leaders Index. VanEck uses the index for the ETF.
The ETF uses artificial intelligence to track the social buzz of the top 75 stocks with market capitalizations over $5 billion.
Cramer Excited For ETF: CNBC's Jim Cramer shared his excitement for the ETF with viewers Thursday morning.
“This is the first ETF that has captured my fancy in a very long time,” Cramer said, noting he likes the algorithm method. Cramer also said having Portnoy attached will generate a lot of excitement.
Cramer had an interview later Thursday with Portnoy to discuss the new ETF.
“I’m trying to capture Portnoy, you are exciting and combative,” Cramer said. “You have figured out what people care about.”
Cramer has been trying to find an ETF or a way to invest in the top stocks that new traders are buying and this ETF could be the solution.
“The people are smarter than suits collectively," he said.
Portnoy On BUZZ ETF: Portnoy said the index for the ETF is searching social media and overall public sentiment, not just for the so-called Reddit stocks.
"It's doing its best to judge public sentiment," Portnoy said.
The index for the BUZZ ETF has been around for over five years and outperformed the S&P 500. The past success is a strong indicator of how good the algorithm could be, the two said during the interview.
Portnoy said of the 75 stocks in the index, 50 of them would be stocks he would’ve owned over the last year or two: "For me to put my name on it, I have to believe in it."
Portnoy cautioned investors that the ETF is not set to have wild returns and is much more of a long-term hold.
“This is a new way to crowdsource," he said.
Portnoy said he's a good face for the ETF and underlying index. Portnoy believes in the idea of the ETF and said he wouldn't be involved if he had not seen the results the index has had, the algorithm and a list of the holdings.
"The number one currency that I have is my credibility," he said.
Portnoy told Cramer he bought $2 million in shares of BUZZ at the market open today.
BUZZ Price Action: Portnoy said he was told BUZZ was the fastest-selling first day ETF of all time in the U.S.
Shares of BUZZ closed Thursday at $23.53, trading between $22.97 and $24.96 on its first day on the market.
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