According to a report by Sports Business Journal, FaZe clan is considering a restructuring that “would take it [the company] private.
FaZe Clan went public in July 2022, and initially saw a huge success becoming the first esports organization valued at $1 billion. According to the report, the company traded as high as $24.69 on Aug. 30, 2022, with a low of $0.37 on March 10. FaZe was trading at $0.53 at the close of business on Thursday, meaning it has lost north of 90% of its value. Its shares have closed trading at figures under $1.00 for 44 consecutive days (dating back to Feb. 7).
The consecutive means like the company is likely now in violation of NASDAQ compliance. Nasdaq’s current rules require that primary equity securities, preferred stocks, and
secondary classes of common stock maintain a minimum bid price of at least $1.00 per share for
continued listing. Compliance is broken when a company’s share price closes below $1.00 for a period of 30 consecutive business days (which FaZe has).
In order for a company to become compliant again, the company must maintain a $1.00 closing bid price for a minimum of ten consecutive business within a 180-day compliance period, otherwise, the company will be removed from the Nasdaq.
In its most recent quarterly filing, FaZe reported that it had only $43.9 million in cash assets, which would be enough to fund itself until November. According to the report, FaZe would need between $40 million and $60 million in order to restructure the group.
In conclusion, FaZe likely feels like it won’t reach the much-needed $1 stock price again, and taking the company private would be a means of avoiding further losses.
FaZe members themselves have been critical of the running of the company, with FaZe themselves tweeting that they’ll do “everything in our power to work this out & not let you down”.
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