Concerns are growing around a massive business deal tied to social media star Khaby Lame after a little-known Hong Kong firm announced it had acquired a company connected to the influencer in a transaction that sent its stock soaring and then crashing just as fast.
Earlier this month, Rich Sparkle Holdings disclosed in a filing with the U.S. Securities and Exchange Commission that it was purchasing Lame’s Step Distinctive Limited in an all-stock deal valued at roughly $975 million. The company issued a press release stating that the transaction had officially closed.
Rich Sparkle promoted the move as a major shift into influencer-driven commercialization, promising a full-scale business ecosystem built around Lame. The company also revealed plans to create an “AI Digital Twin” of the viral star while positioning him as a controlling shareholder.
According to Forbes, Rich Sparkle’s stock surged more than 650%, briefly climbing above $180 per share. On paper, that spike appeared to give Lame a multibillion-dollar stake in the company due to his ownership structure. However, because the firm has a very small number of publicly traded shares, financial experts say the valuation may not reflect real-world value.
Rich Sparkle only went public last summer in a modest Nasdaq offering, selling just over one million shares at $4 each, implying a company worth around $50 million at the time. According to its filings, the firm generated less than $6 million in revenue in 2024, primarily from printing financial materials.
The sudden pivot from a niche printing business to a global influencer platform, combined with the wild stock swings, has drawn skepticism from legal and market analysts.
Brenda Hamilton, a securities attorney at Hamilton & Associates Law, called the situation troubling.
“It’s very suspect,” she said, pointing out that the company outlined one business model in its IPO documents before rapidly shifting into a completely different industry and issuing large volumes of new shares that changed control of the company. She added that volatile trading patterns are often a “red flag,” particularly when foreign companies are involved, since they can be harder for U.S. regulators and investors to thoroughly vet.
Adding to the uncertainty, Rich Sparkle has not yet filed a formal SEC document confirming the deal’s completion, even though it announced it had closed.
“That leaves a lot of questions,” said securities attorney Ron Geffner, a former SEC investigator and partner at Sadis & Goldberg LLP. Geffner noted that the eye-popping valuation appears largely tied to Lame’s social media following rather than the company’s underlying financials. Other experts echoed those concerns.
“I’ve only seen that kind of stock chart in a pump and dump scheme,” said Laura Posner, a partner at Cohen Milstein who specializes in investor protection.
The sharp rise didn’t last long. Rich Sparkle’s shares later plunged as low as $41, a drop of more than 75% from their peak. Veteran short seller Jim Chanos of Chanos & Company was even more blunt.
“This looks completely like a Chinese stock promotion,” Chanos said, referencing a pattern where little-known firms connected to China experience sudden stock hype that inflates market value despite minimal revenue or business fundamentals.
Lame, who boasts more than 160 million followers on TikTok and tens of millions on Instagram, waited more than a week after Rich Sparkle’s announcement to comment publicly.
“Congratulations to the team at ANPA very excited to be a shareholder and looking forward to doing great things!” he wrote.
Neither Lame nor Rich Sparkle responded to requests for further clarification about the deal.