The new social media ETF, Global X Social Media (SOCL) has been getting knocked around in the press. There’s too much China. It’s off to a slow start. The real social media companies aren’t even publicly traded yet.
There’s plenty of fodder for the naysayers.
Well, there are also some solid indicators out there. Benzinga pulled them together, and I’ve provided a taste for you below:
1. Not a slow start: according to Benzinga, Global X Social Media attracted $1.4 mn in assets under management in only three days of trading. I can agree that picking up half a million dollars a day is hardly a ‘slow start’. And compared to other ETFs, Benzinga notes, this is particularly true.
2. Worst case: the ‘worst-case scenario’ for Global X Social Media, notes Benzinga, ‘is that it stands an equal chance of disappearing as it does flourishing.’ That’s fair. And, it’s only been trading for four days. It’s time to be realistic.
3. Go easy on China: yes, some see the 37 per cent weighting toward China as a problem for this ETF. China’s part of the market. A big one. And, as Inside IPO noted recently, there’s room for the weightings to mature as the social media market does.
4. Go easy on profits: it’s true that several social media companies are struggling to show real money.Groupon and Jive Software are in the red; Zynga has had its woes. In some cases, however, it takes time to realise potential.