The Nasdaq stock market has reportedly issued a deficiency notice to popular esports organization FaZe Clan since their share price has been below $1 for more than 30 consecutive business days. The news was first reported in an SEC filing on March 24.
Dexerto reports that the esports company now has 180 days to regain compliance with Nasdaq's minimum bid price rule, which implies the share price must rise over $1 and stay there for ten consecutive trading days.
If they do not comply, FaZE may be eligible for another 180-day period, but they will be delisted if they do not adhere again.
What's Next for FaZe Clan?
FaZe's stock price had closed below the $1 minimum for 32 trading days as of March 24, with the current price fibbing at $0.67. This represents a considerable decrease from the all-time high of more than $20 per share recorded in August 2022.
FaZe "cannot provide assurance that these efforts [to regain compliance] will be successful," according to the SEC filing. If the organization fails to regain the stock price within the time limit specified, it may file an appeal with the Nasdaq hearing panel.
Internal Issues
In addition to financial troubles, FaZe has been embroiled in an internal conflict, as certain founding members have spoken out against the organization's treatment of them. The group replied to the claims by asserting that it was working hard to resolve the concerns.
According to GameRant, these issues have produced negative press and may have contributed to FaZe Clan's stock price decrease. For instance, GameRant cites popular Esports player Talal Almalki, often known as Virus, who recently departed FaZe Clan and accused the company of maltreatment throughout his tenure.
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FaZe Clan Plans to Go Private Again
Furthermore, Dexerto tells us that FaZe is apparently looking towards taking the firm private again, less than a year after it went public. This move may aid the organization in regaining control of its operations and financial situation.
FaZe, like many other esports and gaming organizations, has lately laid off employees as part of their financial discipline. Other esports organizations have also raised concerns about the potentially detrimental influence on other organizations owing to FaZe Clan's stock market performance.
How This Will Affect the Esports Industry
This news is significant for the esports and gaming industry, as FaZe is a well-known and respected organization with a massive following. It remains to be seen whether they will be able to regain compliance with the Nasdaq stock exchange and continue their operations as usual.
Tech Times reported in December 2022 that the public markets are starting to exhibit dissatisfaction with the industry. FaZe Clan went public via a SPAC in July, and its stock has fallen by roughly 80% since then.
According to Forbes, organizations continue to suffer since there is little competition, and only Twitch and YouTube are genuinely interested in esports content. Media rights revenue has yet to catch up with those viewership figures. Therefore, talent is becoming increasingly expensive.
Stay posted here at Tech Times.
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