At its 2023 Annual Meeting of Stockholders on Monday, FaZe Holdings Inc. shareholders voted to approve a reverse stock split of the company’s outstanding shares of common stock. The ratio of the reverse stock split will be 1-for-20 or 1-for-30 and will be put into effect at a date to be determined.
The approval of a reverse stock split is not unexpected; The Esports Advocate reported FaZe’s efforts to implement a reverse stock split in April. The move will help bring the company back into compliance with one of the Nasdaq stock exchange listing rules. On March 24, FaZe Holdings revealed in an SEC filing that it had been sent a letter from the Listing Qualifications Department of the Nasdaq Stock Market informing it that it had “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.”
From the time of receiving the notice of delisting, FaZe has 180 calendar days (until 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,” which can occur any time within the 180 day period. FaZe also has the right to file for an extension of an additional 180-calendar day compliance period.
FaZe began the year trading at around $1.74 (Jan. 3), but by Feb. 8, the stock slid below $1 to $0.94. Since that time the stock has remained below the $1 compliance threshold of the exchange, and has mostly remained at around $0.50. In the scenario that FaZe Clan’s stock price continues to hover around $0.50 per share until the reverse stock split is completed, the per share price would jump to approx. $10 at a 1-for-20 or to approx. $15 at a 1-for-30 ratio. The market capitalization of the company will be unaffected by the reverse stock split.
Shareholders also approved a proposal to renew the appointments of Mickie Rosen (who has been on the board since July 2022 and is a member of audit and nom Gov committees) and Arena Group CEO Ross Levinsohn (who has also been a board member since July of 2022) as Class I directors to serve until 2026.
Finally, shareholders ratified the appointment of Marcum LLP as the company’s independent registered public accounting firm for the fiscal year ending Dec. 31, 2023.
Tobias Seck contributed to this article.
