Breaking: FaZe Sent Deficiency Warning by Nasdaq

Credit: Faze Clan

According to a filing with the SEC on Friday, FaZe Holdings announced that it has been sent a letter from the Listing Qualifications Department of the Nasdaq Stock Market informing it that it has “failed to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) based upon the closing bid price of the Common Stock for the 30 consecutive business days prior to the date of the Letter.”  

FaZe Clan’s share price dropped below $1 on Jan. 20, for the first time. While the stock recovered to a price of more than $1 in the following days, Feb. 8, marks the last day the FaZe share traded above $1. From the time of receiving the notice of delisting, the company has 180 calendar days, that period ends on Sept. 19, to get back in compliance. To regain compliance with Nasdaq, the closing bid price of the common stock “must meet or exceed $1.00 per share for a minimum of ten consecutive business day.” 

This can occur any time within the 180 day period. It can also be eligible for an extension of an additional 180-calendar day compliance period. 

“It’s no secret FaZe Clan is in a dire situation,” business analyst Tobias Seck tells The Esports Advocate. “With the company’s annual results due next week, a recovery of its share price above $1 is unlikely considering investors might not like the 2022 deficit FaZe’s leadership will reveal. However, the delisting notice itself will be one of their lesser headaches as a reverse stock split would bring the company back into compliance with Nasdaq listing rules without fixing any of the businesses underlying issues. In this scenario, a 10:1 reverse stock split would mean current shareholders would receive 1 share for every 10 shares they currently own, consequently, increasing the share price by 10 times and boosting FaZe’s share into a safe range above $5 per share.”

Editor’s note: This story was updated with further context and some analysis from Tobias Seck (he’ll be joining TEA in early April as a contributor).