North American esports giant FaZe Clan is reportedly evaluating acquisition offers from GameSquare Esports and Enthusiast Gaming, While discussions are still ongoing, the potential deal may involve an equity swap or a cash injection.
In response to the report, both FaZe Clan and GameSquare have declined to comment, leaving the situation shrouded in mystery. However, a recent SEC filing by FaZe Clan stated that the company's board of directors is actively assessing various options to reshape its capital structure, hinting at a potential partnership with a strategic or financial entity.
The news follows a tumultuous period for FaZe Clan after going public on NASDAQ in July 2022. Despite its continued success in esports competitions, the organisation's stock value experienced a sharp decline from $1.74 at the beginning of 2023 to a mere $0.41, prompting a notice of delisting from NASDAQ. In an effort to meet the required $1 stock price threshold, FaZe Clan's shareholders approved a reverse stock split earlier in July.
In Q1 2023, the organisation reported a net loss of $14 million, further adding to the challenges it currently faces. Both potential acquisition offers are intriguing, as they come from other publicly NASDAQ-listed companies with their own esports assets - GameSquare Esports owns Complexity Gaming, while Enthusiast Gaming possesses Luminosity Gaming, Seattle Surge, Vancouver Titans, EV.IO, and various gaming websites.
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