Brief Moment of Success Fails to Stop FaZe Clan From Struggling in its Stock Market Debut

FaZe had a rough start on the stock market last week when the company’s stock fell by 25%. This led to a lot of fans questioning the organization’s decision to go public via a special-purpose acquisition company (SPAC). Moreover, many refused to invest in a SPAC merger, following the unprofitable trends associated with it.

With that being said, yesterday’s numbers showed that FaZe may have managed to overcome the initial turmoil. The company’s shares unexpectedly increased by a huge value yesterday. Many fans expressed joy at the news. But, most trading experts realized the common phenomenon behind it and hence, weren’t excited about it.

Being a hugely popular eSports and content creation company, FaZe received a lot of applause when the company shared its decision to go public. A lot of fans, creators, and personalities around the world supported their plan, considering the massive financial possibilities. However, many dreams crashed when FaZe couldn’t please notable investors.

The first announcement from FaZe Clan came back in October 2021, when officials applied for the merger with a SPAC, B. Riley Principal 150 Merger Corp. However, it was only last month when the merger went through after the SEC gave its nod. Some more meetings and signatures later, FaZe was finally ready for public trades and debuted for the same on July 20.

FaZe shares increase in value after an uneventful debut

As a result of FaZe entering public trade just last week, their shares feature a low trading volume and relatively high short interest, making such shares perfect for a short squeeze. So, what does this mean for FaZe’s future as a publicly traded company?

READ MORE: FaZe Clan Touches Almost a Billion-Dollar Valuation for Investors With Latest Merger

FaZe shares went up by 43% yesterday, after suffering almost a week full of discouragement. This prompted a lot of fans to celebrate, including Jake Lucky, a reputed eSports Insider, who posted a tweet mentioning the feat.

However, many fans dealing with trading and investments pointed out at it is just a trading phenomenon, Short Squeeze. According to a definition from Investopedia, a short squeeze is when “a stock moves sharply higher, prompting traders who bet its price would fall to buy it in order to avoid greater losses”. You can learn more about short squeeze in trading here.

As a result, stocks associated with FaZe Holdings Inc have crashed today. At the time of writing, their stocks are down 3.54%, which proves that the investor opinions from yesterday were correct. As of now, only time will tell if or when FaZe makes a real comeback on the NYSE!

Have you bought FaZe shares after it debuted last week? Let us know in the comments!