An exchange-traded fund is seeking to capitalize on the popularity of Reddit-favorite stocks such as GameStop Corp. GME and AMC Entertainment Holdings Inc. AMC by tracking high short-interest stocks trending on social media.
What Happened: The Roundhill MEME ETF seeks to track the performance of the Solactive Roundhill Meme Stock Index, according to a filing with the U.S. Securities and Exchange Commission on Thursday.
In turn, the Solactive Roundhill Meme Stock Index seeks to track the performance of “meme stocks,” which the filing defines as equity securities of companies that exhibit a combination of elevated social media activity and high short interest.
See also: How To Buy AMC (AMC) Stock
The index components of the ETF will rebalance every two weeks based on their “social media activity score” over a trailing 14-day period.
The ETF will trade on the New York Stock Exchange under the ticker “MEME” upon receiving regulatory approval.
Why It Matters: The new ETF is the latest to attempt to capitalize on the retail trading boom this year.
The VanEck Vectors Social Sentiment ETF BUZZ, backed by Barstool Sports founder Dave Portnoy and launched in March, invests in stocks that show the most positive investor sentiment using artificial intelligence (AI) to track social buzz. However, the fund’s year-to-date returns are only 9.4%, compared to the S&P 500’s year-to-date gains of 19%.
Price Action: AMC Entertainment shares closed 8.3% lower in Thursday’s trading at $40.31, while GameStop shares closed almost 2.8% higher at $205.22.
Photo: Courtesy of Andreas Praefcke via Wikimedia
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