As the GamesStop stonk fiasco has proven, social media can have a huge impact on the stock market. No one seems to be a bigger believer in the power of Twitter or Reddit than Dave Portnoy.
Portnoy, the founder of Barstool Sports turned Twitter day trading guru, has signed on to launch a new ETF that tracks the most-talked about stocks on social media. The Buzz Index, as it’s known, was created by asset manager VanEck last month using an algorithm that crawls the internet for keywords on sites like Twitter and StockTwits. An ETF, or exchange traded fund, is a collection of securities — stocks, bonds, or commodities — that trade on an exchange the same way a stock does.
Portnoy announced his involvement in the Buzz Index in a video Tuesday, complete with cartoon animations featuring Portnoy’s head on (who else?) Buzz Lightyear’s body.
“They showed me their algorithm,” Portnoy said about VanEck in the video. “I said, this is brilliant. Of course it'll work. If you don't adapt, you die. Twitter, social media, all of it is dictating stock prices. Nobody has seen that more than me over the past year. I wish I could own a million stocks but you can own them all. Well, that's the beauty of Buzz ETF.”
The Buzz Index is set to launch on Thursday, March 4. Its portfolio will consist of 75 large-cap stocks, including its largest constituent, Virgin Galactic. Just because people are talking about a meme stock on Twitter, does that mean investing in the ETF will guarantee returns? Portnoy says so — he noted that the Buzz Index’s algorithm has been in the works for the past five years, and that last year, it beat the S&P 500 by 40%.
“Now, is it some ritzy-glitzy trying to get 100% gains? No, this is just the best of the best,” he said.
Portnoy himself didn’t exactly win big in the GameStop craze driven by Reddit’s /wallstreetbets. He ended up losing $700,000 in the frenzy, but gained 340,000 Twitter followers in a matter of days thanks to his coverage on the topic.
Portnoy ended the video like a true showman, saying, “It takes a lot for me to put my reputation, my balls on the line. I am doing it this time. Buzz ETF Thursday.”