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FaZe Banks To Become FaZe Clan CEO Following GameSquare Acquisition

FaZe Banks To Become FaZe Clan CEO Following GameSquare Acquisition

After months of internal strife within FaZe Clan, accusations of misogyny among its ranks, and a plummeting stock price, the organisation might finally be turning around a year of disappointments.

On October 20, gaming analytics and esports company GameSquare Holdings Inc. announced that it would be acquiring FaZe Clan for $17 million— just over one year after the org entered the stock market with a valuation of $725 million

FaZe announced its intention to go public in October 2021 and debuted on the Nasdaq stock exchange on July 20, 2022. The organisation’s CEO at the time, Lee Trink, worked with investment firm B. Riley Financial to take the company public via SPAC, otherwise known as a Special-purpose acquisition company. 

This unconventional path required FaZe to increase its valuation from approximately $300 million to $1 billion. And to do this, B. Riley Financial invested in the esports company while the FaZe team onboarded big names like Pitbull and Snoop Dogg. However, with most of these investors signing non-binding agreements, FaZe’s private investment soon fell through. 

While stock prices initially moved up and down, FaZe was largely successful. In August 2022, shares peaked at approximately $20 USD, and the company became “the first esports organisation with a $1 billion valuation.” But by the end of September 2022, 92% of the merger shareholders cashed out.

This left the org in shambles, with shares failing to comply with Nasdaq’s $1 minimum bid. Soon, the company had to let go around 20% of its staff.

With stocks plummeting to a new low, Snoop Dogg resigned from his position on FaZe Clan’s board of directors just one year after joining the organisation. By the end of Q2 2023, the company posted a $14 million net loss. And just last month, Lee Trink was fired.  

Trink’s tenure as CEO was marked by turbulence, with many FaZe members calling out the trajectory of the esports body. Teeqo and Rain have been the most vocal, questioning why the company continues to prioritise celebrity endorsements over the creators that started FaZe Clan. 

This division is something that GameSquare hopes to address. As a part of the acquisition, FaZe’s founding members will return to leadership positions in a bid to “reestablish authenticity” among audiences. Richard “FaZe Banks” Bengston is set to become the CEO, Thomas “FaZe Temperrr” Oliveira is taking on the role of President and Yousef “FaZe Apex” Abdelfattah will become the COO. 

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“The acquisition of one of the biggest names in gaming serves as a perfect illustration of how we have built a powerful infrastructure with an expansive scale that we can use to leverage the full spectrum of resources,” says the CEO of GameSquare, Justin Kenna. “We are also thrilled to welcome back the founders of FaZe Clan and their fans, one of the most deeply engaged communities born on the internet.”

FaZe Clan will operate as an independent division of Gamesquare, with hopes of “refreshing the FaZe Clan brand, re-engaging with its core fanbase and empowering individual FaZe Clan creators”, the press release explains. 

The transaction is expected to be finalised by the end of the year, pending approval from both FaZe Clan and GameSquare shareholders. Once the transaction is completed, current GameSquare shareholders will hold roughly 55% of the combined company. Meanwhile, FaZe Clan shareholders will retain about 45%.

While FaZe Clan still has a long way to go before it recovers its nearly $1 billion valuation, it’s safe to say that with original members leading the way, the organisation stands a better chance.

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