FaZe Clan, a popular esports organization founded in 2010, has announced that its founders and major investors are offering their shares for sale as the company continues to struggle with financial issues. In an effort to boost its struggling public stock, FaZe Clan is proposing the issuance of up to 5.92 million new shares and reselling up to 46.98 million existing shares.
The company’s financial woes came to light when it went public and reported a staggering net loss of $168.5 million for the financial year. To address this, the company is taking the bold step of offering up to 51% of its total shares of Common Stock outstanding as of April 18, 2023, for resale, which could result in a new majority owner taking over.
However, the sale of these securities, or even the perception of such a sale, could further reduce the company’s already declining share price. FaZe Clan went public on Nasdaq in July 2022 and peaked in August, reaching a share price of over $20, with a market cap of $1.86 billion. However, the company has since struggled, and its market cap has collapsed to approximately $35.5 million.
Several major stakeholders, including B. Riley, CEO Lee Trink, and founding members Temperrr, Banks, and Apex, have offered their shares for sale, as has rapper Snoop Dogg, who is selling nearly 300,000 shares.
At the time of writing, FaZe Clan’s share price is a mere $0.51, which has prompted a deficiency notice from Nasdaq. To regain compliance, the company’s stock must recover to over $1 and hold that higher price for at least 10 trading days within 180 days of the warning.
It remains to be seen what the future holds for FaZe Clan, but the company’s decision to offer up a majority of its shares for sale is a clear sign of the financial struggles it faces. Despite the uncertain times, FaZe Clan remains a popular esports organization, and its fans are likely hoping for a swift turnaround.
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