Esports company FaZe Clan has completed a SPAC merger deal worth $725 million, and began trading on the Nasdaq on Wednesday.
FaZe Clan is an online media and digital entertainment company, looking to tap into the appeal of online content creators and professional gamers. The company’s social media creators boast a combined following of over 500 million across multiple platforms such as YouTube, Twitch and TikTok.
The company is extremely popular with young audiences. FaZe claims about 80% of its audience is between the ages of 13 and 34. It boasts 11 competitive esports teams playing popular video games such as Counter-Strike:Global Offensive, Fortnite and Valorant and is also associated with big celebrity personalities such as Snoop Dogg and rapper Lil Yachty.
Forbes estimated in 2022 that FaZe Clan was worth around $400 million, up 31% from the previous year. But since then, in an amended SEC filing in April, FaZe revised its forecasts downward, predicting a $36.9 million net loss on revenues of $52.9 million in 2021.
This uncertainty, worsened by the prospect of an economic recession, affected trading of the stock on its first day. FaZe Clan, trading under the ticker FAZE, sank on its debut.
The merger, with the SPAC B.Riley Principal 150 Merger Corp., was first announced in October. The company was considered ideally suited to the SPAC process, which circumvents the lengthy process of going public via a conventional IPO. At the time of the merger announcement, FaZe said it was worth $650 million and had ambitions of reaching a valuation of $1 billion. The merger itself was initially declared to be worth $1 billion, but the figure has since dropped to $725 million.
“I understand why other companies have been criticized for going public via the SPAC vehicle. But for us, it really fits,” FaZe Clan CEO Lee Trink said.