After Facebook officially changed its name to Meta, traders bid up shares of funds and companies that could be mistaken for the social-media company’s new name.
Justin Sullivan/Getty Images
An exchange-traded fund with the ticker symbol META saw a flood of new cash after Facebook officially changed its name to Meta Platforms.
The $142 million Roundhill Ball Metaverse ETF pulled in $12.5 million on Thursday, its largest single-day inflow since early September. Trading volume in its shares surged to a new high on Thursday, too.
This comes after social-media giant Facebook (ticker: FB) said it would shift focus to developing the metaverse, a connected virtual world powered by augmented reality and virtual reality. The company will start trading under the ticker MVRS in December.
Since the announcement, traders have bid up shares of funds and companies that could be mistaken for Facebook’s new name. Shares of Meta Materials (MMAT), a Canadian material sciences company, saw its shares jump 8.3% since Wednesday’s close to trade around $4.71 as of Friday afternoon. The stock has been a target of meme-stock traders, reaching an all-time high of $21.76 in June.
Cases of mistaken identity aren’t uncommon in the investment world. When Elon Musk posted on Twitter about a messaging app called Signal in January, shares of a tiny medical device company with a similar name surged 5,000%. Similarly, when Zoom Video Communications (ZM) made its debut on the public market in 2019, penny stock Zoom Technologies , whose ticker was ZOOM at the time, soared 56,000% within 30 days.
But in the case of meta names, there might be more at play. “While yesterday and today’s trading volumes have been significant, we have seen consistent interest in META since its launch in June, including from institutional investors,” Will Hershey, CEO of Roundhill Investments told Barron’s in an email. “Facebook’s name change announcement is simply the latest news with regards to various companies’ commitments to building the Metaverse.”
It’s unfair to attribute the fund’s strong inflow to confusion over the ticker name, Matthew Ball, one of the creators of the index behind the metaverse ETF, said on Twitter Friday morning. Facebook’s reiterated ambition in metaverse simply brought huge attention and validation to the multi-trillion dollar investment opportunity, wrote Ball in the tweet.
In a report released at the beginning of the year, ARK Investment Management, the fund company led by popular stock picker Cathie Wood, estimated that revenue from virtual worlds could approach $400 billion by 2025.
The Metaverse ETF, launched at the end of June, invests in 41 global companies that are actively involved in the Metaverse, including companies providing hardware, computing power, network connections, virtual platforms, interchange standards, payment process, and digital content in the virtual world. The fund’s top holdings include Nvidia (NVDA), Microsoft (MSFT), and Roblox (RBLX). Facebook is its fourth-largest holding, with nearly 6% weight.
Write to Evie Liu at [email protected]
