All news: Faze Clan Stock

In the summer of 2022, the North American esports organization FaZe Clan announced the long-awaited merger of its business with the investment fund B. Riley Principal 150 Merger Corp. At the same time, the club went public on the NASDAQ by issuing common shares and warrants under the tickers "FAZE" and "FAZEW", respectively.

No one had any doubts about the popularity of the FaZe Clan brand, which is why many predicted a grandiose success from the deal and a long-term increase in the financial well-being of the organization. Of course, many have seen a rather negative example of Astralis, which appeared on the exchange three years ago, but FaZe Clan is popular all over the world.

However, the company faced huge challenges that brought the organization to near-bankruptcy. As a result, FaZe Clan runs the risk of being left without a livelihood as early as 2023. But before that, it is worth telling about all the difficulties along the way that such an eminent club had to face.

Volatility of FaZe Clan quotes on the NASDAQ exchange

Almost from the very start, after the merger with B. Riley Principal 150 Merger Corp, the organization's quotes on the NASDAQ exchange were fixed at + - $10. At some point, their value jumped to $13.02, but very soon dropped to $9.58.

Nevertheless, such a trend could be associated with the recent appearance on the stock market, especially since already in early August the quotes jumped “to heaven” and reached their peak of $20.

But FaZe Clan did not rejoice for long, because very soon the cost returned closer to $10. However, during the month they managed to return to $17-19, leaving little hope.

However, in the fall, the North American club filed an S1 form with the SEC, outlining its intention to issue new shares as well as an insider selling period. Prior to this, the organization also presented its financial report for the second quarter of 2022, which cannot be overlooked in assessing subsequent events.

Based on a combination of factors, FaZe Clan quotes on the stock exchange rushed down to stop at $9.26 by the end of September. But the club's adventures in the stock market did not end there either, as the company continued to observe a sharp drop in quotations.

By the end of the year, the situation on the market worsened, as in December the price of one share of FaZe Clan stopped at a level below $2. At the same time, the company must prepare for the next shock, which will occur in January. Then employees and owners will have the opportunity to sell their shares, risking another collapse of quotes.

Reasons for the protracted crisis of FaZe Clan

Most recently, Forbes magazine published an interesting article in which they revealed some details of the business of the North American club. In particular, the journalists managed to unearth the details of the agreement with the rapper Snoop Dogg, as well as shed light on the low profitability of the business itself.

In the spring, FaZe Clan managed to sign Snoop Dogg to get the rights to use the brand of the popular rapper. But if the public saw only image advantages from the deal, then the financial statements and details of the agreement said quite the opposite.

FaZe Clan has reportedly agreed to give Snoop Dogg $1,900,000 worth of shares and a seat on the company's board of directors, as well as $248,000 worth of shares to each of his sons and companies controlled by his wife and manager.

But this is just the tip of the iceberg, which can very soon destroy the “unsinkable” business of FaZe Clan.

In the same September, when the organization was faced with a strong volatility of quotes, rushing down, because of which new problems were exposed. From regulatory documents, Forbes journalists were able to find out that approximately $71,400,000 of the initial investment of $100,000,000 went bankrupt.

To make matters worse, 92% of SPAC shareholders chose to buy back their shares for cash at the time of the merger rather than convert them into new FaZe Clan common shares, causing the organization to lose $159,000,000 from its trust account.

Taking into account the weak quotes of the organization's shares, it can count on a capitalization of just over $150,000,000. However, the club has many other problems that go beyond the “adult toys” on the exchange.

Firstly, FaZe Clan is one of the largest esports organizations in the world, with a fan base estimated at millions of fans. Secondly, the club annually enters into large partnership agreements with well-known brands and companies.

But at the same time, FaZe Clan does not know how to make a profit, relying only on external investments. Let's look at the numbers: in the first three quarters of 2022, the organization's revenue was $48,600,000, but only $14,000,000 of them were earned through advertising and esports success.

What's next for the organization?

There is no indication that FaZe Clan will be able to save its position in the stock market. The issuance of new shares also does not bode well, since at the current cost, such activities will ruin the company even faster.

It remains to rely on internal changes that should occur as soon as possible. First of all, FaZe Clan should find opportunities for monetization. Recent reports show that the organization is making terrible use of its assets, while the focus is on content creation, marketing activations, and competitive activity.

However, with victories in major tournaments it is impossible to predict. The organization currently relies on multiple disciplines, including Halo, CS:GO, Rainbow Six, Rocket League, PUBG, and FIFA. At the same time, it is easy to guess which line-up brings the club the greatest benefit. There is no VALORANT on this list, since FaZe Clan did not make it into the affiliate program and is in danger of saying goodbye to discipline.

There are two directions left, one of which is content creation. Now the club has enough influencers who, interacting with the partners of the club, can bring money. However, without new sponsors, FaZe Clan will find it difficult to diversify all available streams.

From recent transactions, we can see that the organization continues its development towards fashion trends. Now FaZe Clan has actively hit Web3, NFT and metaverses. But it is unlikely that these transactions will lead the company out of the protracted crisis, since even large sponsors do not always give confidence in the future.

To sum it up, FaZe Clan's stock market venture has failed, and the organization risks exacerbating an already meager situation in the coming months. According to experts, if the situation does not change, the club may be bankrupt in November next year.

Of course, it is hard to believe in such a scenario, but for the last six months, alarming news has been heard from the FaZe Clan camp. Perhaps the club's management will find the right steps and be able to attract additional funding. Right now, however, the organization is on the brink, despite the size of its brand.