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The majority owners of North American esports and lifestyle organisation FaZe Clan have put their share of stock up for sale, according to a form filed with the US Securities and Exchange Commission (SEC) on May 5th.

The sale would see up to 62.5% of FaZe Clan’s current outstanding shares sold, including the option to sell to a private company — who could bring the organisation off the public market. The news was first reported by The Esports Advocate.

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The company will not receive revenue from the sale of the shares. Instead, the money will go to its largest shareholders. Original SPAC owner B. Riley Principal Investments currently owns the lion’s share, but other shareholders include company founders and personalities Yousef ‘FaZe Apex’ Abdelfattah, Richard ‘FaZe Banks’ Bengtson II, Thomas ‘FaZe Temperrr’ Alves De Oliveira, and Nordan ‘FaZe Rain’ Shat.

Those founders, alongside B. Riley, CEO Lee Trink, COO Zach Katz, Snoop Dogg and many others are planning to sell their shares, per the SEC filing.

The news comes after FaZe Clan’s stock has failed to trade above $1 on the Nasdaq since 8 February, following a massive decline from its original offering of $725m (~£630m.) Like many loss-making companies, FaZe entered the market through a special purpose acquisition corporation (SPAC); effectively a shell company already publicly listed on the market. 

SPACs have typically trended downwards over the last 12 months due to a declining overall market as they present more risk to shareholders than profit-making entities. Other SPAC-heavy sectors like biotech and healthcare have similarly trended downwards.

The desired sale by the company’s leadership marks another grim headline for FaZe Clan. In April, Snoop Dogg, who’d joined as a content creator and board member in March 2022, left the company’s Board of Directors. Additionally, in March, FaZe Clan reported a $53m (~£43m) for 2022.

The organisation was sent an official deficiency warning from NASDAQ late in March; a warning that the stock has begun a 180-day notice period that could see it delisted if it does not begin to trade at over a $1 share price, or conduct a stock split to inflate the value of an individual share.

FaZe Clan SEC filings show that the company is indeed preparing to carry out a reverse stock split.