- Faze Clan went public last July in deal valued at US$725m
- Stock price fell to 53 cents at close of business on 23rd March
Esports giant Faze Clan is considering a restructure that would see it go private as it continues to struggle financially, according to Sports Business Journal (SBJ).
The gaming organisation went public last July after completing a merger with the B. Riley Principal 150 Merger Corp (BRPM) special purpose acquisition company (SPAC). At the time, the newly combined company called Faze Holdings was valued at US$725 million.
However, it has seen its stock price decline significantly, putting itself at risk of being delisted by the Nasdaq stock exchange. As of 23rd March, the company was trading at 53 cents at the close of business, having lost more than 90 per cent of its initial value. Having seen its shares close trading at figures under a dollar for 44 consecutive days, the company is thought to likely now run afoul of Nasdaq compliancy.
SBJ now reports that the esports group is now looking to make a U-turn and go private, due to its financial troubles. Faze Clan recently revealed it had only US$43.9 million in cash assets, which would only be enough to keep the company afloat until November. For a restructure to be carried out, Faze Clan is said to require a fund raising drive of between US$40 million and US$60 million.
The company’s financial woes have stirred up discontent among its long-time members, with Nordan Shat (aka Faze Rain) recently calling out Faze Clan for allegedly under-paying him for branded content. Fellow member Jakob Swaerden (aka Faze Teeqo) and internet influencer Mr Beast have also been critical of the group, with Faze Clan then admitting its mistakes in a subsequent response.
As well as being a gaming organisation, Faze Clan has since promoted itself as a esports, lifestyle and media brand. It claims to have a fanbase network of around 500 million across its combined social platforms.