FaZe Clan Stock Continues to Plummet, Reaches All-Time Low

Since listing on the NASDAQ in July 2022, FaZe Clan has undergone a relatively volatile journey. From an all-time high of $20.08 per share, FaZe Holdings Inc’s value has crashed down to an all-time low of just $3.41 per share within the space of two months. This news comes just weeks after the revelation was made that FaZe Clan received just 30% of what was ‘promised’ by investors ahead of its SPAC in July.

As time goes on, FaZe Holdings Inc. is struggling to gain ground, and its stock price continues to haemorrhage. As September came to a close, FaZe Clan announced that it would be attempting to raise funds by selling up to 70 million shares of its stock. This ‘dilution’ of shares essentially caused the value of existing shares to drop by as much as 34%, with some investors jumping ship ahead of the inevitable, impending value crash.

Determined to Succeed

Image Credit: Google Finance

There was a considerable drop in the value of FaZe Clan’s stock in the days after the organisation became listed on the NASDAQ. It was the first esports team to be listed on the NASDAQ, but, admittedly, it wasn’t the most inspiring effort, especially if we look closely at the firm’s performance since then. It was revealed at the end of September that, out of the $100 million ‘backstop commitments’ made ahead of the SPAC, more than $71 million worth defaulted on their obligations.

In August 2022, FaZe Clan reported a $9m loss in Q2, which was another considerable hit. However, despite the somewhat negative announcement, FaZe Clan’s leadership seemed unperturbed, looking ahead to ‘new business initiatives’.

There was a saving grace for FaZe Clan amidst the wreckage, though. Following the departure of many of the organisation’s investors, B. Riley Financial, the leading body in July’s SPAC merger, invested a massive $54 million in FaZe Clan to cover the missed obligations. Reportedly, FaZe Clan is still relatively cash-rich and isn’t likely to run out of funds anytime soon. There are still ongoing strategies that are paying off, such as the Disney x FaZe partnership that kicked off in May 2022.

The Esports Experts

Image Credit: ESL

FaZe Clan boasts a highly scalable business model that has, so far, proven to be relatively consistent. It’s arguably the leading esports organisation in the industry right now, and it has a reach that exceeds half a billion followers. At present, the organisation finds itself competing across several different games, and aside from a few outliers, it tends to be the dominating firm upon every platform it finds itself.

This year, FaZe won the PGL Antwerp Major, IEM Katowice, IEM Cologne, and ESL Pro League 15, and they were just the CSGO tournaments that the organisation competed in. In the last ten months, FaZe Clan (and associated teams) has netted a staggering amount of prize money from esports tournaments:

• CSGO – $1.6m
• VALORANT – $35k
• Rocket League – $544k
• Rainbow Six – $349k
• Call of Duty – $1.1m
• PUBG – $50k
• PUBG Mobile – $49k
• Halo – $139k

Outside of tournament winnings, FaZe Clan maintains a steady and popular collection of content creators, huge merchandise sales, and various projects that continue to fund the ongoing business at large. It’s difficult to become profitable as an esports organisation, but FaZe Clan is by far the best in the game at present, even amidst a share value crash.