Dave Portnoy-backed Buzz ETF adds GameStop, Palantir, and Chewy in monthly rebalancing

GameStop store New York City January 2021.JPG

The Van Eck Vectors Social Sentiment ETF (BUZZ) added 21 stocks to its holdings and dropped 21 others in its monthly rebalancing on Thursday.

Big-name additions included GameStop, Palantir, Ryan Cohen’s Chewy, Rocket Companies, Nike, Visa, and Starbucks.

Top stocks dropped from the ETF included Nikola, Fastly, Etsy, Dropbox, and Twilio.

The BUZZ ETF, famously backed by Barstool Sports’ Dave Portnoy, tracks the performance of 75 large-cap US stocks that exhibit the most positive investor sentiment on online sources like social media, news articles, and blog posts.

The ETF’s top holdings, representing more than 15% of total net assets, include big tech giants like Apple, Amazon, Square, Nvidia, and Tesla.

“The April rebalance is one of the more active in recent months,” said Jamie Wise, the founder of Buzz Indexes. “The sentiment shifts are notable and diverse, reflective of the heightened level of investor discussion across social platforms.”

GameStop recently met eligibility requirements for the ETF by hitting a $5 billion market cap.

Read more: BTIG identifies 14 beaten-down stocks poised to dominate the market this earnings season and extend their track record of crushing expectations

Van Eck has made it clear in interviews that its ETF is not just a place for “meme stocks,” but this month’s rebalancing showed that multiple top Reddit trader favorites made the cut.

GameStop, Rocket Companies, Palantir, and Chewy have all been popular on Reddit’s Wall Street Bets platform at one time or another.

The Buzz ETF, launched on March 2, now boasts over $400 million in total net assets. However, performance has lagged behind the S&P 500: Total returns are negative 3.4% over the lifetime of the exchange-traded fund.

The social-sentiment ETF has had plenty of competition since going public. It’s one of about 100 ETFs that have made public debuts in 2021, according to data compiled by Bloomberg – the most public debuts by ETFs in over a decade.

Here’s the full list of the ETF’s April additions and departures:

Buzz etf adds
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The short-seller that uncovered fraud at Nikola is accusing another upstart EV maker of misleading investors

Unveiling of the Lordstown Endurance_June 25, 2020_2
Hindenburg alleges that Lordstown’s orders are “largely fictitious.”

  • Hindenburg Research, which published a report on fraud at Nikola, has taken aim at Lordstown Motors.
  • The short-seller accused the EV startup of misleading investors, sending shares plummeting 20%.
  • Lordstown did not immediately respond to Insider’s request for comment.
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Hindenburg Research, the short-seller that accused Nikola of “intricate fraud” and unraveled its deal with General Motors, is taking aim at another electric-vehicle startup.

The firm said Friday it is taking a short position in Lordstown Motors, accusing the company of pumping up preorder numbers to generate investor interest in a lengthy report. Like many EV startups, Lordstown went public through a special-purpose acquisition company in October.

Shares of Lordstown were down nearly 17% as of Friday afternoon.

“Lordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” Hindenburg said in its report titled “The Lordstown Motors Mirage.”

Lordstown did not immediately return Insider’s request for comment.

Read more: Nikola founder Trevor Milton convinced the world he was the next Elon Musk. Insiders say a history of lies brought the billionaire down.

Lordstown was founded in 2018 and plans to produce a commercial pickup truck for fleet use, the Endurance, at a shuttered GM plant in Lordstown, Ohio. One of Hindenburg’s key accusations is that, although Lordstown has said it has 100,000 preorders, few of those customers actually plan on buying a truck.

“Our conversations with former employees, business partners, and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” the short-seller said.

Hindenburg detailed conversations with multiple Lordstown preorder holders who said they don’t intend to follow through. One business owner who signed up for a 1,000-truck order said they won’t actually order any vehicles and described the preorder as a marketing relationship, according to Hindenburg.

Lordstown CEO Steve Burns pushed back against the claims in a statement to Bloomberg, saying “we always stated that pre-orders were non-binding. That is what pre-orders are.”

The short-seller also alleges that Lordstown is much further away from production than it says. It cites a former employee who estimates that production will start in three to four years, rather than by September, as Lordstown says.

Former employees also told Hindenburg that Lordstown “has completed none of its needed testing or validation, including cold weather testing, durability testing, and Federal Motor Vehicle Safety Standards testing required by the NHTSA.”

In September 2020, Hindenburg published a report accusing Nikola and its founder, Trevor Milton, of fraud. In the aftermath of the accusations, Milton departed the company and a major deal with GM fell through.

Nikola denied most of the allegations but said in February that it had determined that Milton made several inaccurate statements following an internal investigation.

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Nikola slides 12% after JPMorgan downgrades to neutral given that the ‘good news is priced in the stock’

nikola tre prototype
Nikola said it completed the first of five Tre prototypes planned for this year.

  • Nikola fell 12% on Friday after JPMorgan downgraded the firm to neutral from overweight, according to a note. 
  • The call from JPMorgan was “a tactical move” as much of the good news is priced into the stock.
  • Nikola’s steep decline on Friday came amid a broader decline in electric vehicle stocks like Tesla.
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Shares of Nikola dropped as much as 12% on Friday after JPMorgan downgraded the fuel-cell truck developer to neutral from overweight, according to a research note.

JPMorgan’s drive to downgrade Nikola was “a tactical move” based more on the timing of future catalysts than the underlying fundamentals, the note said.

According to the bank, the “good news is now priced in the stock, so we step aside for now,” the note said. The bank maintained its price target of $30, representing potential upside of 87% from Thursday’s close. 

Much of that good news includes evidence that the company is more focused on its goals and is passed the drama caused by founder and former CEO and chairman Trevor Milton.

Milton voluntarily stepped down from the company as chairman in late September, after a short-seller report from Hindenburg Research alleged that Milton and Nikola deceived investors. Nikola dismissed many of the claims raised in the report.

Nikola “has left much of the drama of 2020 behind,” JPMorgan said. 

But JPMorgan sees the Nikola’s story exciting investors once again in mid or late 2021 if customer orders are announced, “and as the first FCEL prototype comes to life,” the note said.

The decline in Nikola on Friday came amid a broader market sell-off in high-growth tech stocks that have been shunned by investors amid rising interest rates. Shares of Tesla were down as much as 13% on Friday.

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