Earlier this year, Donaldson tweeted the idea of selling parts of his company “for billions of dollars.” Earlier he had mentioned the idea of an IPO.
Last year, news site Axios reported that he was considering outside funding that would value his business empire at around $1.5 billion. In technical parlance, that would make him a unicorn.
Celebrity-owned companies are nothing new. In the late ’90s, David Bowie issued asset-backed securities based on earnings from his albums. George Clooney used to sell tequila. Rihanna has a makeup line.
BUILD A BRAND OUTSIDE SOCIAL MEDIA
However, for online stars who trade views, the ratings are still a work in progress. Even YouTube megastars can find that their names mean little to an older audience, hurting their chances of building a brand outside of social media.
In 2022, an online media company comprised of 93 content creators and esports competitors joined the markets through a merger with a special purpose vehicle. FaZe Clan, as they call themselves, has a combined total of more than 500 million followers across multiple platforms including YouTube, TikTok, and Twitch. Revenue comes from sources such as ads in videos and branded offers featuring the scary-sounding orange chicken pizza roll.
But the market interest in FaZe Holdings does not bode well for Donaldson. Acquisition company with special purpose (SPACs) typically start at $10 per share. FaZe Holdings now trades for less than $0.30 per share.
Donaldson’s enthusiasm for an IPO appears to have waned. After customer complaints, he sued Virtual Dining Concepts, the company behind MrBeast Burger, and was subsequently countersued.
Meanwhile, videos keep coming. It will be difficult to escape the limitations of YouTube.
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