Don’t Be Fazed by Action-Packed B. Riley Principal 150 Merger SPAC

Don’t be intimidated by the long and odd-sounding name of blank-check company B. Riley Principal 150 Merger (NASDAQ:BRPM). Once you learn about the company’s business-combination plans, you’ll probably want to own a few shares of BRPM stock.

A photo of wooden blocks that say SPAC on a folded newspaper.

Source: Dmitry Demidovich/ShutterStock.com

B. Riley Principal 150 Merger is engaging in a special purpose acquisition company (SPAC) transaction with FaZe Clan. Therefore, investors should focus more on FaZe Clan’s business than on the shell company.

At some point, the combined company’s common stock is expected to be listed on the Nasdaq Exchange under the ticker symbol “FAZE.” So be prepared for that change.

As you’ll see, FaZe Clan is quite popular and it targets a young audience. Consequently, the company has a great deal of potential. At the same time, BRPM stock has already popped and then flopped, so you might have a chance to buy the shares at a relative discount.

A Closer Look at BRPM Stock

For many months, BRPM stock stayed near $10. That’s not unusual behavior for a pre-merger-announcement SPAC stock.

The press release regarding the SPAC’s business combination with FaZe Clan was issued on Oct. 25, 2021. You can probably guess what happened next.

In 2021, it seems like nearly every SPAC stock has to shoot to the moon after its merger target is announced. And of course, that’s what happened with BRPM stock.

On Oct. 26, the share price topped out at $15.74 for an immediate 50%+ gain. As it turned out, that would have been a great place to take profits. Fast forward to yesterday, and BRPM stock closed just above $10.50, not far from its pre-deal-announcement price.

If you happened to buy the stock near the top, you’re definitely in a tough position. On the other hand, investors may have a chance to get in on a ground-floor opportunity at a low price now.

A Youth-Focused Platform

If you’re Gen X (like I am) or a Baby Boomer, then FaZe Clan might not appeal to you. That’s because the SPAC’s press release describes FaZe Clan as a “leading digital content platform created for, and by, the Gen Z and Millennial generations.”

However, I know Gen X-ers and Boomers who enjoy video games and other digital content. So I imagine that practically anyone should be able to use FaZe Clan.

Between the company’s owned and operated channels and its network of content creators and personalities, FaZe Clan has a combined social media reach of over 350 million.

Moreover, with the SPAC merger, FaZe Clan is “positioned to become one of the only digitally native, youth-focused lifestyle and media platforms publicly traded on a U.S. national exchange.”

E-sports, Metaverse and More

Financially speaking, FaZe Clan should be in a good position as a result of the SPAC transaction. That’s because the company is expected to receive estimated gross transaction proceeds totaling $291 million.

You might assume that FaZe Clan is only a video-game business, but it also has an e-sports connection. In fact, the company has ten competitive e-sports teams which reportedly have won 30 championships worldwide.

Furthermore, B. Riley Principal 150 Merger Corp. CEO and CFO Dan Shribman alluded to FaZe Clan’s opportunity to expand its multi-platform presence “across content, gaming, entertainment, consumer products and the metaverse.”

I didn’t find any specific links between FaZe Clan and the metaverse. Still, investors can hope that FaZe Clan ventures early and often into the burgeoning and potentially lucrative market which the metaverse represents.

The Bottom Line

FaZe Clan is directed towards young people. There’s no denying this, as roughly 80% of its audience is between the ages of 13 and 34. Yet investors of all ages should be able to appreciate its profit potential as FaZe Clan has a vast audience.

Plus, the company is involved in the e-sports market and may venture into the metaverse as well. As a result, FaZe Clan looks like a high-conviction business, and BRPM stock could be a major bargain at its current price.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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