From $1 Billion to Almost Worthless: Faze Clan Runs Out of Hype
Three months after its July 2022 debut on the Nasdaq, FaZe Holdings Inc. threw an exclusive party at a San Diego nightclub, hiring the rapper Travis Scott to promote its stable of video-game stars and YouTube personalities.
Social-media influencers mingled with gamers in expensive streetwear. Many looked bored as they filmed the event for their online channels. Well past midnight, Scott appeared for a 15-minute show, his voice barely audible over the thumping bass. The party, which cost $1.7 million, got the company and a sponsor's name in hundreds of Google search results, YouTube videos and Instagram stories. Lee Trink, FaZe's chief executive officer at the time, hailed the event as a great success.
“We achieved all of the things we would have hoped for, including making money,” he said in an interview after the party.
But with losses mounting and the shares tumbling, the company fired Trink, 55, on Sept. 9, replacing him on an interim basis with Chief Financial Officer Christoph Pachler. Interviews with seven former employees describe a mismanaged organization marked by poor spending decisions, excessive pay and expansion into unprofitable categories like esports. The company, which employed 112 people at year end, has been enmeshed in controversies involving its online personalities and announced two rounds of layoffs this year.
Los Angeles-based FaZe reported a $48.7 million loss from operations last year. After initially projecting that it would debut on the stock market with a $1 billion valuation, its shares have tumbled to 18 cents from over $20, reflecting skepticism that the social-media activities of young, largely male gamers could ever be a sustainable business — even if they have millions of fans. Last month
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