FaZe Clan is officially a public company

by Adam Fitch  · 
FaZe Clan is officially a public company
ESL

FaZe Clan, a major entertainment company and esports organization, is now a public company on the Nasdaq.

The journey: It hasn't been straightforward for FaZe Clan.

  • The organization announced that it had entered a merger agreement with B. Riley Principal 150 Merger Corp. — a public company designed specifically to acquire an existing private entity — in October 2021.
  • At the time, the merged company was expected to have an equity valuation of approximately $1B. This would have made FaZe the most valuable esports organization by a long shot.
  • A filing in April 2022 revealed that the acquisition could have been in trouble as FaZe Clan financially performed much worse than what was estimated. Specifically, its Adjusted EBITDA for 2021 fell short by $9.7M compared to what was projected.
  • From there, B. Riley and FaZe Clan entered discussions to understand what the future of the esports org's business would look like and whether the terms of their agreement could still be met.
  • Earlier in July 2022, the companies had their S-4 filing accepted by the Securities and Exchange Commission (SEC) and it would be down to shareholders to approve the deal on July 15. The meeting saw the merger get the go-ahead.

Going public: The real test begins now.

  • Retail investors can now own a piece of the popular organization, which is known for housing content creators and competing in esports tournaments.
  • There are a few public esports organizations but none are as well-known as FaZe Clan in the mainstream of entertainment, this could be seen as the true test for esports. Are retail investors willing to back a competitive gaming brand or will the stock price slowly decline over time like the others?
  • FaZe lost $28.7M in 2021. Much like other esports organizations, there's seemingly a long road ahead for profitability to be achieved. The org now has to share its financial performance and business happenings which will undoubtedly lead to scrutiny greater than it's ever received before. The future is uncertain but one thing is for sure: FaZe Clan has officially gone from a group of Call of Duty players to a public company.