Faze Clan is almost synonymous with esports, and the organization’s worldwide popularity is undeniable. However, Faze Clan’s financial troubles have been quite apparent since they went public, and we can confirm that they have now been acquired by Texas-based esports company, GameSquare.
The origin of Faze Clan can be traced back to 2010 when three Call of Duty players, Eric “CLipZ” Rivera, Jeff “House Cat” Emann, and Ben “Resistance” Christensen, began showcasing their trick shots on YouTube. In fact, it can be argued that Faze popularized the term “trickshot,” and it took them only two years to reach a million subscribers on the video-sharing platform. Naturally, things took off from that moment, and soon Faze transitioned into the gaming, entertainment, and lifestyle brand they are known as today.
Although Faze’s popularity in the gaming industry is irrefutable, they have been facing financial issues ever since going public in July 2022. This is what makes the GameSquare acquisition even more interesting, and we are here to break it down for you.
The GameSquare acquisition will give Faze Clan a much-needed lifeline
Faze Clan had grand aspirations when they went public via a special purpose acquisition company merger in July 2022. They hoped for an implied value of $1 billion and were committed to reinventing their brand as a champion of “youth culture.” However, several of their investors backed away after the deal, and a fresh wave of controversies crippled the organization until their stock prices fell below the dollar mark in January 2023.
According to Nasdaq guidelines, if a company’s stock trades for under a dollar for thirty consecutive days, they would receive a deficiency notice, warning them of getting de-listed. Faze Clan received this notice in March 2023, and although they had 180 days to get their stock price back up, the situation was quite concerning and soon led to multiple layoffs. Eventually, it seemed like Faze Clan was on its last legs when Snoop Dogg left the board in April 2023, and the then-CEO, Lee Trink, was terminated in September of the same year.
Nevertheless, October helped Faze turn over a new leaf as it was acquired by GameSquare in an All-Stock deal. For the uninitiated, GameSquare is a Texas-based esports organization backed by the one and only Jerry Jones, better known as the owner of the Dallas Cowboys. Moreover, the deal, which is expected to close in Q4 2023, will value Faze Clan at $16 million, and while GameSquare shareholders will own 55% of the newly acquired organization, older Faze Clan shareholders will retain 45%.
Faze Clan might see some of its founding members returning to leadership roles
Interestingly, merging with GameSquare might take Faze Clan back to its roots, as some founding members are reportedly returning to take up leadership positions. People familiar with Richard “FaZe Banks” Bengtson will be delighted to know that he will be taking up the mantle of CEO, while Thomas “FaZe Temperrr” Oliveira and Yousef “FaZe Apex” Abdelfattah will fill the position of President and Chief Operating Officer (COO), respectively.
Richard seemed quite excited about the new beginning, and he vowed to take Faze back to its glory days, claiming, “We grew up on the internet and understand this brand better than anyone ever could.” He also thanked GameSquare for the opportunity during the press release, and said, “We are grateful to have found a partner in GameSquare who sees that value in us and can help execute our vision. We’re going to produce first, talk later.”
