The meteoric rise of esports and the organizations that run them have become noted in the business world. This growth reaches its somewhat obvious conclusions as FaZe Clan announces that it will enter the stock market.

Once the merger is complete, FaZe Clan will have a $1 Billion valuation. The majority of the $1B comes from a specialized company known as a SPAC, along with $291 Million FaZe Clan says it expects to raise by Q1 2022 when it will go public. Its stock sign will be under the sticker name FAZE on the NASDAQ.

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FaZe Clan is using what's called a Special Purpose Acquisition Company, or SPAC, to become a publicly listed company on the stock market. The SPAC is essentially a shell company that acts as a stepping stone for a 2nd company looking to become listed merges with them. The original company (here listed as B. Riley Principal 150 Merger Corp.) has done most of the legwork to be listed. FaZe Clan will come in as the front-facing company on the stock exchange while the SPAC funds the rest of the deal. This merger between the companies will combine their estimated value to become eligible for listing on the NASDAQ. The $1B price tagT is only an estimate, so by the time FaZe Clan does go public, it may be more or slightly less than advertised. That figure depends on what new ventures FaZe Clan ops-in to like signing new members or expanding into more pro esports leagues.

FaZe Clan describes itself as "a leading gaming, lifestyle, and media platform" with a core audience that connects with the Millenial and Gen-Z generations. The company has grown from its inception in 2010 as a content hub for trick shotting and gaming compilations to what it is today as a huge organization with esports teams that compete in Fortnite, Call of Duty, PUBG: Battlegrounds, and more. With that fame, it has gained enough notoriety to house celebrities that are tangentially involved in esports and gaming like the NBA's Ben Simmons of the Philadelphia 76ers and the NFL's Juju Smith-Schuster of the Pittsburg Steelers. In April 2020, FaZe Clan began expanding into film and TV Production, starting FaZe Studios.

Skeptics have claimed that FaZe Clan is using an easier, more volatile method in becoming a publically listed company. Usually when news drops of a company joining the Fortune 500 ranks, it does so as an IPO. IPOs would require more time to court potential investors in order to gain the funds it needs to be a publically listed company on the stock market. Using a SPAC streamlines the process to go through one entity, but is deemed more unpredictable. The company's propensity to be unwittingly involved in controversy may also affect how much money it can raise from expanding partnerships. FaZe Clan stated in the announcement intends to diversify its brand in more games and regions like the Middle East and Brazil. Its openness to come forward with that information may mean there are probably deals in the works that will help it reach that goal.

The maturation of the gaming space will continue as the core audience gets older and becomes more educated and somewhat financially secure. FaZe Clan hopes that its strategy of being a company that thinks of its fans first and talks directly with them is enough to attract them to invest in the company directly.

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Source: PC Gamer