Photo: FaZe Clan
When FaZe Clan, an esports company turned gaming lifestyle agency, went public last year it claimed to be worth $700 million. Just six months later it’s worth just a fraction of that. Whether it’s the controversy constantly swirling around some of its members or the fact that the esports bubble has finally popped, nobody wants to buy into FaZe Clan it seems, potentially making one of the biggest bets in gaming a complete bust.
On January 20, the stock price fell below $1 for the first time ever. It continued to slide throughout last week and is now just north of $0.80. If things stay that way for over a month FaZe Clan will get delisted from the New York Stock Exchange entirely. It’s now effectively a penny stock, and a ticking time bomb. Last September, FaZe Clan reported $43.9 million cash on hand. Forbes recently projected it would likely run out before the end of 2023. The company was never profitable, but now it’s something even worse: a company that can’t convince anybody it one day will be.
Founded back in 2010, FaZe Clan includes pro teams competing in esports ranging from Call of Duty to Smash Bros. and individual players who bring in millions of subscribers on Twitch and YouTube. As esports rode the wave of genuine fan excitement puffed up by investor hype, the purses for competitive gaming events ballooned. At the same time, fans flocked to watch their favorite players chill on Twitch and YouTube and perform everything from trick headshots to bumming around a Hollywood mansion called the Clout House.
Screenshot: Google / Kotaku
The real money has always been in advertising though, and FaZe Clan’s gamble was believing it could successfully sell its members’ huge social media followings to other brands desperate to reach Gen Z and their younger siblings. The group collaborated with big names like Snoop Dog and Pitbull. And in June 2021, FaZe Clan sought to convince the money people it wasn’t just a bunch of dudes playing video games by appearing on the cover of the recently gutted Sports Illustrated.
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