FaZe Clan goes public via SPAC deal
Just this week, one of the most popular esports and entertainment organizations, FaZe Clan, announced that it has gone public in a SPAC merger with a capital market company, B. Riley Principal 150 Merger Corp or BRPM.
According to Axios’ Sara Fischer, FaZe was valued at $725 million in the merger, which was lower than its initial intended value of $1 billion back in October last year. The gaming brand now trades on Nasdaq with the ticker symbol “FAZE”.
More on FaZe’s decision to go public
FaZe’s share price plummeted by 30 percent within an hour of launch after opening at $13.02 per share. However, it has been recovering slowly since and is now hovering at $9,88 per share at the time of writing.
FaZe’s merger was approved by BRPM shareholders on July 15. It remains unclear why the organization resorted to SPACs at that time, considering that companies that went public with it lost half of their value in 2022, and the market value kept getting worse this month, as per Yun Li of CNBC.
“We believe SPACs will need to continue to evolve in order to overcome challenges,” Wells Fargo’s senior global alternative investment strategist James Sweetman said via CNBC. “General market volatility in 2022 and an uncertain market environment resulting in losses in the public markets have also dampened enthusiasm for SPACs.”
In a different report, Dot Esports’ Preston Byers noted that FaZe’s reason for going with SPACs would likely be due to the company seeing it as an “alternative to initial public offerings”.
Aside from the market volatility of SPACs, FaZe had a rough and long journey in becoming a public company. Initially, the merger was expected to wrap in Q1 this year, but the plan had to be pushed back to Q3 following the company’s financial forecast.
FaZe CEO Lee Trink was well aware of their rough start as a public company. Despite this, Trink remains optimistic that FaZe will be able to get more monetization opportunities from various areas in the future. Via The Washington Post’s Jonathan Lee, Trink said these areas include gambling, ghost kitchens, fan clubs and potential collaboration with Web3 companies, as well as entering the metaverse.
“We are well positioned to expand our platform internationally as half of our fanbase network is ex-U.S.,” Trink said via The Hollywood Reporter’s Alex Weprin. “There are a number of emerging categories that provide opportunity to unlock more monetization of our enormous combined fan base network of 500 million.”
Trink also explained that FaZe would gear more towards the creator economy and their young or Gen-Z audience — in which he claimed that 80 percent of FaZe’s audience are between the age of 13-34.
“As we invest in and expand our talent network and welcome the ascent of new stars, we will give them the resources, strategy and investment to grow as the creator economy also shifts,” Trink added.
“By bringing our resources, our business connectivity and our understanding of how we were able to unlock value for ourselves and our creators, we plan to work with other influencers and brands to allow them to be CEOs of their own ecosystem.”