FaZe Clan reportedly looking to go private less than a year after Nasdaq listing

Less than a year after debuting on the Nasdaq exchange, esports and lifestyle company FaZe Clan is reportedly weighing up the option of going private.

According to a report by Sports Business Journal, FaZe is “considering a restructure that would take it private”, just eight months after going public on the Nasdaq exchange via a special purpose acquisition company, more commonly referred to as a SPAC.

The deal valued FaZe Clan at $725 million (which was lower than the $1 billion valuation when the SPAC merger with B. Riley Principal 150 Merger Corp was announced), but the esports giant has nosedived since debuting on the exchange at approximately $13 per share. It is currently trading at $0.53 a share after hitting a low of $0.37 on March 20.

Companies on the Nasdaq exchange risk a deficiency notice if they close below $1 for 30 consecutive business days. FaZe Clan has been trading below that minimum closing bid price requirement for 32 consecutive business days.

According to the report, FaZe “would need between $40 million and $60 million” to restructure the company and shift it back into private ownership. FaZe is “struggling in such efforts,” the report added.

The news comes at a tumultuous period in the esports industry, which is facing what has been called the “esports winter”, with many companies, from team organizations to media outlets and event organizers, laying off staff or even ceasing operations.

FaZe Clan’s dire financial situation

In its latest quarterly filing, FaZe Clan reported having only $43.9 million in cash assets, which would be enough to fund the company’s operations until November 2023.

FaZe will release its financial results for the fourth quarter of 2022 and the full year on March 30. These financials will provide a more detailed picture of the company’s financial health as it considers ways to go private.

Only recently, FaZe slashed 20 percent of its workforce in a massive round of layoffs that began in December and concluded in February. In an internal memo, FaZe CEO Lee Trink said that he was “optimistic” about the future of the company but noted that it was operating “in a very different economic environment” than it was when it went public.

On March 19, 100 Thieves CEO Matthew ‘Nadeshot’ Haag shared his thoughts on FaZe’s declining stock price. “You could say it’s their own doing, and they f**ked us by jumping in and giving that a shot, their lack of success on the market is a terrible thing for the esports industry,” he said on his stream.

In recent months, FaZe have also had to deal with intense criticism from some of its members, including Nordan ‘Rain’ Shat and Jakob ‘Teeqo’ Swaerden, forcing the company to break a week-long silence on Twitter.

“We know that for too long we haven’t been the FaZe we need to be, but we’re working hard towards fixing that,” FaZe said on March 22. “We hope to have all the OGs sit down together soon, and we don’t want to do that without everyone. We’ll do everything in our power to work this out & not let you down.”

Note: A previous version of the story misstated FaZe’s valuation in the SPAC deal as $1 million. The deal was initially valued at $1 billion when the merger with B. Riley Principal 150 Merger Corp was first announced. However, when the deal was finalized, it was valued at $725 million.