- Faze at risk of Nasdaq delisting
- Company posted US$53.2m loss for 2022
- Staff have been laid off as Faze continues ‘redefining structure’
Esports outfit Faze Clan is assessing acquisition offers from Gamesquare and Enthusiast Gaming, according to Sports Business Journal (SBJ).
The parties reportedly remain in discussions over an agreement that would include some form of an equity swap deal and a possible cash infusion.
Canada-based Gamesquare went public on the Nasdaq in March and its notable acquisitions have included Complexity Gaming in a deal worth US$27 million. The company counts Jerry Jones, owner of the National Football League’s (NFL) Dallas Cowboys, among its investors and has popular gaming streamer Tyler ‘Ninja’ Blevins on its books. Complexity itself has esports teams covering the likes of FIFA, Madden and Fortnite.
Enthusiast, which is also headquartered in Toronto, is backed by Vancouver Canucks chairman Francesco Aquilini and owns Luminosity Gaming, which fields teams in several titles, including Call of Duty, Overwatch and Rocket League. Enthusiast also launched a Tuesday night esports series with the NFL in 2022 as part of a multi-year tie up.
Faze Clan’s woes since going public last summer have been well documented. Having been valued at US$725 million in its merger deal with the B. Riley Principal 150 Merger Corp (BRPM), the company has been at risk of delisting and has until 19th September to sort out its stock price troubles. Additionally, Faze reportedly laid off around 40 per cent of its workforce in May and posted a net loss of US$53.2 million for 2022.
Speaking two months ago, Faze chief executive Lee Trink (pictured above) said the organisation was not “abandoning the aspirations we have” but conceded larger goals needed to be set aside in order to tackle preexisting challenges.
Securing fresh investment, or even selling outright, would likely provide a boost to Faze’s share price, while welcome capital would support the company in navigating through a testing time that is also being felt across the wider esports industry.
It is not clear how close a deal with either Gamesquare or Enthusiast is. Indeed, the latter’s chief executive Nick Brien claimed in a statement to SBJ that the company has “not submitted any offer to acquire Faze Clan, nor does it anticipate doing so”.
Regardless, it is clear Faze is in the process of readjusting its ambitions. New backers could help it chart a more prosperous course.