ETFs
ETFs will ride the resurgence of Meme Mania: will the rally last?
Meme stocks rebounded Monday following the return of “Roaring Kitty” or Keith Gill, a social media influencer who sparked the 2021 meme stock rally on social media after a three-year hiatus. X.com’s Roaring Kitty tweeted an image of a person sitting forward in a chair holding a video game controller — a popular meme among gamers that means “things are getting serious.”
The post attracted considerable attention, garnering over 10,000 retweets, 24,000 quote tweets, 94,000 likes and over 19 million views, highlighting its widespread appeal and importance. Investors flocked to companies with relatively poor fundamentals, which retail traders had piled into in 2021 to drive up their stock prices. The rally is reminiscent of the meme stock market frenzy of 2021 (read: 5 Defensive Investing ETF Strategies for Your Portfolio).
Meme Stocks on the Move
GameStop Corp. shares GME, the world’s largest video game retailer, more than doubled after this release. Its trading has been halted eight times due to volatility. The stock added about $6 billion in market value in less than an hour, with traders seeing Gill’s return to tweets as a sign that the memo stock boom is returning.
Other meme stocks also surged. AMC Entertainment Holdings Inc. AMC rose nearly 80%, marking its largest one-day gain since June 2021 and the third largest in its history. Headphone maker Koss Corp (KOSS) soared 38%, while Hertz Global (HTZ) rose nearly 12%. The newly listed Reddit (RDDT) jumped 14%. Beyond (BYON) — the new name for Overstock that acquired meme darling Bed Bath & Beyond last year — jumped more than 18%.
Given this, investors could exploit the resurgence of meme mania with ETFs targeting these stocks like VanEck Social Sentiment ETF BUZZ and SoFi Social 50 ETF SFYF.
VanEck Social Sentiment ETF (BUZZ)
VanEck Social Sentiment ETF provides exposure to 76 large-cap U.S. stocks that exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, articles press releases, blog posts and other alternative data sets. This is easily done by following the BUZZ NextGen AI US Sentiment Leaders Index.
VanEck Social Sentiment ETF has amassed $61.3 million in its asset base while charging 75 basis points in annual fees.
SoFi Social 50 ETF (SFYF)
The SoFi Social 50 ETF tracks the SoFi Social 50 Index and is comprised of the 50 most widely held U.S.-listed stocks on SoFi Invest, where companies are measured by the number of accounts that invest in those stocks. Consumer discretionary leads the way with 29.7%, while technology (28.9%) and communications (24.1%) round out the next two places.
The SoFi Social 50 ETF has amassed $15.5 million in its asset base and charges 29 basis points in annual fees.
The story continues
Will the meme frenzy continue?
Meme stocks refer to shares of a company that have become popular on social media platforms due to increased social sentiment rather than company fundamentals, resulting in increased volumes and stock prices. actions. These are therefore considered speculative.
Meme stocks are triggered by small traders who cause a short squeeze in the stock. Short squeeze is a term used by market participants to refer to a phenomenon whereby short sellers of a stock, who have bet on it falling, rush to cover their positions or buy the stock in the event of a price movement. unfavorable price in order to cover their losses. This leads to a sharp increase in demand for stocks and a sharp rise in stock prices.
Investing in these stocks is a risky choice and could result in heavy losses. This is because when enthusiasm for the stock subsides, it could cause the stock price to plummet and investors could end up losing their capital. The fundamental health of these companies does not seem healthy (read: ETFs to make the most of sector rotation).
GameStop cut a number of jobs to cut costs in March and reported a decline in fourth-quarter revenue amid growing competition from e-commerce companies and weak consumer spending. The stock has seen negative earnings estimate revisions of 11 cents for the fiscal year (ending January 2025) and 14 cents for the fiscal year (ending January 2026) over the past 60 days. Its profits are expected to decline by 83.3% this fiscal year but increase by 900% over the next.
GameStop shares were flat before the latest year-to-date rally and had risen about 60% over the past month. With the latest rally, GameStop is now up more than 180% in a month. The stock currently has a Zacks Rank #5 (Strong Sell).
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GameStop Corp. (GME): Free Stock Analysis Report
AMC Entertainment Holdings, Inc. (AMC): Free Stock Analysis Report
SoFi Social 50 ETF (SFYF): ETF Research Reports
VanEck Social Sentiment ETF (BUZZ): ETF Research Reports