Portnoy ETF Buzz Trades on Social Media and Popular Sentiment – ​​Sportico.com

Barstool Sports founder turned day-trader Dave Portnoy has a new investment to promote: an ETF, of which he will get a share for every dollar invested by the investor.

Portnoy announced a new equity-focused ETF with high levels of social media engagement, dubbed BUZZ, to begin trading on Thursday. The ETF, officially named the VanEck Social Sentiment ETF, will trade under the symbol BUZZ. The fund uses algorithms to track social media and news, buying the top 75 large-cap stocks considered most discussed by the algorithm. The announcement of the social media-focused investment fund came fittingly enough, on Portnoy’s Twitter feed. “A new ETF that I’m part of, I put my face behind it, my reputation behind it,” he said. noted in the ad.

Portnoy is co-owner and director of the company, Buzz Holdings ULC, which licenses the strategy to VanEck. “He represents the Index and has no affiliation with VanEck. He does not provide investment advice on behalf of VanEck. There is no affiliation with VanEck and Barstool Sports,” VanEck said in a statement sent by email.

Portnoy’s two partners in Buzz Holdings are Jamie Wise and Michael Kimel, according to a filing with British Columbia, Canada, where Buzz is registered. Wise is the founder of Periscope Capital, an arbitrage hedge fund, which means he uses long and short selling approaches, among other methods, to stay neutral in the market. Kimel is owner of Toronto’s Overwatch franchise and co-founder of Chase Hospitality Group. He would also be a minority owner of the Pittsburgh Penguins, although this information could not be immediately confirmed. Kimel is the scion of a wealthy Ontario family and is considered one of Toronto’s 50 most influential people, according to a regional magazine.

The index buys large-cap US stocks that have the “highest degree of positive investor sentiment and bullish perception based on aggregated content from online sources, including social media, news articles , blog posts, and other alternative datasets,” according to a press release about the fund. , provided by VanEck. The strategy uses natural language processing, a form of artificial intelligence, to determine whether chatter about a headline is positive or negative. The fund is then rebalanced monthly.

Individuals who license indexes or strategies to ETFs, like Portnoy, typically receive a percentage of the assets under management compiled by an ETF, so it is in Portnoy’s best interest to publicize the fund. Three hours after its video announcement, the Twitter post has been viewed 655,000 times. The VanEck ETF prospectus is not yet official and it does not yet disclose the fees paid to Portnoy and Buzz Holdings. Generally speaking, an ETF with $150 million in assets, the level at which an ETF is considered viable, would earn around $150,000 in licensing fees, although fees can vary widely.

The Barstool Sports founder has become well known for turning to day-trading during the pandemic, often pumping shares of Penn National Gaming, which owns a minority stake in Barstool. Portnoy is the face of an aggressive retail style that is upending typical Wall Street dynamics, as the recent GameStop stock squeeze shows. The brutal style of social media-focused day-traders like Portnoy can be overkill – billionaire hedge fund and Mets owner Steve Cohen quit Twitter in January after receiving personal threats stemming from an online conversation that he had with Portnoy around GameStop.