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Earlier this year, Donaldson tweeted out an idea to sell parts of his businesses “for billions of dollars”. He had previously mentioned the idea of an initial public offering.
Last year, news website Axios reported that he was considering external funding that would value his business empire at around US$1.5 billion. In tech parlance, this would make him a unicorn.
Celebrity-run businesses are not new. In the late 90s, David Bowie issued asset-backed securities based on revenues from his albums. George Clooney used to sell tequila. Rihanna has a make-up line.
BUILDING A BRAND OUTSIDE SOCIAL MEDIA
For online stars who trade in views, however, valuations are still a work in progress. Even YouTube megastars can find that their names mean little to older audiences, hampering their chances of building a brand outside social media.
In 2022, an online media company made up of 93 content creators and esports competitors joined markets via a merger with a special purpose acquisition company. The FaZe Clan, as they call themselves, claimed a combined following of more than 500 million across multiple platforms such as YouTube, TikTok and Twitch. Revenue comes from sources including ads on videos and brand deals that include the gruesome sounding Orange Chicken Pizza Roll.
But market interest in FaZe Holdings does not bode well for Donaldson. Special purpose acquisition company (SPACs) tend to open at US$10 a share. FaZe Holdings now trades at less than US$0.30 a share.
Donaldson’s enthusiasm for an IPO appears to have waned. He sued Virtual Dining Concepts, the company behind MrBeast Burger, following customer complaints, and was counter-sued in response.
All the while, the videos keep coming. Escaping the confines of YouTube is going to be difficult.
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