FaZe Holdings Inc witnessed a strong rally of 36% at the Monday opening bell, with the average daily trading volume exceeding 445,000. It is unclear what fueled the surge, and there is a decent chance it was driven by speculation. Nevertheless, the upswing makes no significant impact to offset challenges faced by FaZe, which saw its market valuation crumble by nearly $1 billion in a year.
FaZe Down 85% YTD
Shares of FaZe Holdings, a globally known esports organization, surged 40% at the market open on Monday. The rally is unusual because the company has no specific news or SEC filings.
According to Yahoo Finance, nearly 40 million shares of FaZe have changed hands, with an average daily trading volume of more than 445,000. At one point, the pump propelled FaZe’s stock price to a 3-week high of $0.24 before retreating to $0.21. However, the overall trend remains significantly negative, with FaZe’s year-to-date performance at -86%.
The rally is likely driven by speculation or a scheme by day and retail traders, who often target penny stocks for their pump-and-dump efforts.
FaZe Nearly Worthless Despite Today’s Rally
Today’s surge in FaZe shares may raise eyebrows among investors, but the rally does little to offset the company’s mounting fundamental problems.
Earlier this month, the company fired its former CEO Lee Trink, replacing him with CFO Christoph Pachler, who took on the top role. The move came in the wake of FaZe’s rapid share price decline and growing losses due to poor spending decisions, excessive pay, and expansion into unprofitable areas.
Notably, FaZe posted a $48.7 million loss from operations last year and announced two rounds of layoffs in recent months. In addition, the company’s stock price collapsed substantially to below $1, from $14.7 in the same period last year.
This slump has made FaZe almost worthless, erasing nearly $1 billion off its market cap.
Before departing the company, Trink said the management was exploring different options, including a potential sale. Reports from earlier this year suggested that several companies related to gaming offered to buy FaZe, including Gamesquare and Enthusiast.
This article originally appeared on The Tokenist
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