The return of Roaring Kitty, aka Keith Gill, on social media increased interest in meme stocks and may have kickstarted a short rally to start the trading week.
While there are several ETFs that provide exposure to meme stocks, an ETF that previously focused exclusively on meme stocks closed in 2023. Benzinga chatted recently with the CEO of the company behind the MEME ETF.
What Happened: ETF company Roundhill Investments was the first to market with several thematic investment vehicles including a sports betting ETF, launched in 2020.
In December 2021, Roundhill launched a meme stock ETF aimed at capturing interest in meme stocks, which grew in popularity during the early months of the year.
The ETF, which had the appropriate MEME ticker, closed in November 2023. Roundhill Investments CEO Dave Mazza told Benzinga the ETF was closed "due to lack of assets under management and limited trading volume."
With meme stocks gaining interest once again, Benzinga reached out to find out what it would take to bring the ETF back.
"Time will tell is meme stocks make a meaningful comeback outside of the renewed interest in the last week. The current meme wave remains highly correlated in the original 2021 meme stocks, such as GME and AMC," Mazza said highlighting GameStop Corporation GME and AMC Entertainment Holdings AMC.
Mazza said Roundhill had the MEME ticker around six months before launching the ETF and still has the ticker reserved today.
"We're always open to good ideas and welcome feedback on if a meme ETF would be a compelling offering to investors."
Mazza said Roundhill expected the current wave of interest in meme stocks will last a few weeks.
"Considering that AMC already announced plans to issue 23.3 million shares in a debt-for-equity swap, the hype may prove to be short-lived as they're increasing supply."
Mazza said that at Roundhill there was an internal debate on whether it was really Keith Gill posting on the Roaring Kitty X account.
"We believe it is indeed Keith Gill posting on X, but his end game may be different than just ‘liking the stock.'"
Related Link: EXCLUSIVE: Roundhill Launches Covered Call Bitcoin ETF, ‘Potential High Income From Bitcoin’s Volatility’
What's Next: While the MEME ETF was closed, other ETFs from Roundhill are thriving. Mazza highlighted the Roundhill Magnificent Seven ETF MAGS and Roundhill Generative AI & Technology ETF CHAT.
"We recently crossed $1 billion in assets under management fueled by strong interest in our MAGS and CHAT ETFs. Our newer suite of options income ETFs hit $50 million as we continue to diversify our lineup," Mazza said.
The CHAT ETF has the following top holdings as plays on the growth of the AI sector:
NVIDIA Corp NVDA: 11.3%
Microsoft Corp MSFT: 10.4%
Alphabet Inc GOOGGOOGL: 5.3%
Meta Platforms Inc META: 4.2%
Adobe Inc ADBE: 3.7%
The Magnificent Seven ETF offers equal weight exposure, rebalanced quarterly, to the well-known stocks of Alphabet, Amazon.com Inc AMZN, Apple Inc AAPL, Meta Platforms, Microsoft, Nvidia and Tesla Inc TSLA.
Mazza also highlighted the Roundhill GLP-1 & Weight Loss ETF, which is coming soon with the ticker OZEM.
The new ETF will provide exposure to companies involved in the development of weight-loss drugs, according to the Roundhill website.
Weight loss drugs such as Ozempic and Wegovy from Novo Nordisk NVO and Mounjaro from Eli Lilly and Company LLY have taken the market by storm. Many other drug companies have weight loss drugs in the pipeline.
Shares of Novo Nordisk and Eli Lilly are up 57% and 77%, respectively, over the past year.
Photo: Tada Images via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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