The process of going public has been incredibly tumultuous for FaZe Clan. This comes after a recent filing showed that investors defaulted on almost 75% of the funds the organization was supposed to receive from its IPO merger. As a result, the company could only bring in $28.6 million in backstop commitments rather than the $100 million that was initially expected.
These defaults are bad news for B. Riley, the financial institution and sponsor of the special purpose acquisition company (SPAC) that merged with FaZe. That business is now tasked with making sure FaZe Clan receives the $100 million it was originally supposed to get.
In the filing, B. Riley confirmed it would invest $53.4 million into FaZe to replace the previously promised funds. To date, B. Riley has been responsible for over 50% of FaZe Clan’s backstop.
Unsurprisingly, this news did a lot of damage to the value of FaZe Clan’s stock. On September 26th, FaZe was trading at a price of $14.78 a share. As of October 6th, that number has dropped to $5.37.
(All information was provided by IMDb, Investopedia, VentureBeat, and Yahoo! Finance)
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