A major business deal involving TikTok star Khaby Lame and a company called Rich Sparkle Holdings has attracted a lot of attention. The agreement briefly made Lame appear to be worth billions of dollars. However, some financial experts say the situation raises serious questions after the company’s stock price quickly dropped just days later.
The Deal
Rich Sparkle Holdings, a Hong Kong–based company listed on the Nasdaq stock exchange, announced in early January that it planned to acquire a company owned by Khaby Lame called Step Distinctive Limited. The company reported the planned purchase to the U.S. Securities and Exchange Commission (SEC) on January 9.
Two days later, Rich Sparkle released a press statement saying the deal had officially closed. The agreement was worth about $975 million and was completed using stock instead of cash. This means shares of Rich Sparkle were given in exchange for ownership of Step Distinctive.
The company said the partnership would help build a complete business system around Khaby Lame’s brand. According to Rich Sparkle, the plan included a “structured” platform to commercialize Lame’s image and popularity across different markets. The company also mentioned the idea of creating an AI digital twin of Lame that could be used for marketing and other projects.
Under the agreement, Lame was expected to become a major shareholder in the company.
Stock Price Surge
After the announcement, Rich Sparkle’s stock price increased dramatically. The price jumped more than 650%, reaching $180.64 per share on January 15.
This sudden rise pushed the company’s total market value to about $16.3 billion. Because Lame owned around 49% of Step Distinctive, which translated into about 41% ownership of Rich Sparkle, his stake was briefly estimated to be worth about $6.6 billion.
However, there is limited public information available about whether Lame actually sold any shares during this period. Because Rich Sparkle is a foreign company, it does not have to disclose as much information as some U.S. companies.
A Rapid Decline
The stock surge did not last long. Within days, Rich Sparkle’s share price began falling sharply.
At one point, the stock dropped to around $41 per share, which is about 77% lower than its peak price.
The rapid rise and fall of the stock has caused many financial experts to question what really happened.
A Small Company With a Sudden Change
Another factor raising concerns is the company’s background.
Rich Sparkle only went public on Nasdaq about six months earlier, in July. At that time, the company sold about 1.25 million shares at $4 each, giving it an estimated value of roughly $50 million.
According to official filings, the company reported less than $6 million in revenue for 2024. Its main business involved designing and printing financial materials.
Because of this, some experts find it unusual that the company suddenly shifted its focus toward building a digital entertainment business centered around Khaby Lame.
Limited Public Statements From Lame
Khaby Lame himself did not comment publicly on the deal until 11 days after Rich Sparkle said it had closed.
In a short Instagram message, Lame wrote:
“Congratulations to the team at ANPA. Very excited to be a shareholder and looking forward to doing great things.”
Neither Lame nor Rich Sparkle has provided detailed answers to questions from journalists about the deal.
Is Lame Really a Billionaire?
Based on the company’s recent stock price, Lame’s stake would appear to be worth about $3 billion today.
However, financial analysts say this number may not reflect reality. Only a very small percentage of the company’s shares are available for trading in the market, known as a low float. Because so few shares are traded, the stock price may not accurately represent the company’s true value.
For this reason, analysts say Lame’s actual wealth is likely much lower than the multi-billion-dollar estimates.
Experts Raise “Red Flags”
Some securities lawyers and financial experts have openly questioned the situation.
Brenda Hamilton, a securities attorney at Hamilton & Associates Law, said the company’s actions are suspicious. She pointed out that Rich Sparkle originally told investors it planned to focus on one type of business. Yet within less than a year, the company moved into a completely different business model involving social media branding.
Hamilton also said the company issued a large number of shares that significantly changed who controls the company.
She described the dramatic stock price changes as a “red flag.”
Another issue is that companies based outside the United States can make it harder for investors to perform proper research and due diligence.
Unclear If the Deal Fully Closed
There is also uncertainty about whether the transaction was finalized.
Although Rich Sparkle announced that the deal closed on January 11, the company did not file a required document with the SEC confirming the completion.
Experts say this could mean the company missed the legal filing deadline or that the deal may not be fully completed yet.
Ron Geffner, a former SEC investigator and partner at Sadis & Goldberg LLP, said the situation raises many unanswered questions. He noted that the company’s high valuation appears to depend heavily on Khaby Lame’s large TikTok following.
Possible “Pump and Dump” Concerns
Some legal experts say the stock chart looks similar to patterns seen in pump-and-dump schemes, where stock prices are artificially inflated through hype before quickly collapsing.
Short-seller Jim Chanos, founder of Chanos & Company, was even more critical. He said the situation resembles past cases where little-known companies linked to China saw their stock prices skyrocket despite having small revenues.
In these situations, early investors sometimes benefit from the sudden rise in price while later investors can suffer heavy losses when the stock eventually drops.
The Companies Involved
Khaby Lame’s company Step Distinctive Limited was registered in the British Virgin Islands in July 2025, around the same time Rich Sparkle went public.
Rich Sparkle’s IPO was handled by Eddid Securities USA, a company that previously helped list several firms whose stocks experienced similar rapid rises and falls.
Another company involved in the ownership structure, Pink13 Group Inc., was registered in Delaware in June 2025. Its ownership has not been publicly disclosed.
Khaby Lame’s Rise to Fame
Khaby Lame became famous on TikTok during the COVID-19 pandemic in 2020 after losing his factory job in Italy.
His simple, silent reaction videos mocking overly complicated life hacks quickly went viral. Within about 17 months, he reached 100 million followers on TikTok.
Today he has more than 160 million followers on TikTok and 78 million followers on Instagram. Some of his videos have received more than 300 million views.
According to Forbes, Lame earned around $20 million per year, making him one of the world’s most successful social media creators.
Despite the controversy surrounding the recent deal, Lame has previously advised fans not to focus only on money.
In an earlier interview, he said:
“You should not be in a rush to make money. Start by making the content you like.”
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