A $975 million public offering tied to TikTok star Khaby Lame is facing uncertainty as shares of the associated company have experienced a significant decline.
Hong Kong-based Rich Sparkle Holdings announced last month plans to merge with Lame’s social media and e-commerce activities. Though, the deal’s reliance on Rich Sparkle’s stock performance has substantially reduced Lame’s potential earnings amid a recent sell-off.
The company’s shares, which reached as high as $180 last month, closed Thursday at $11, according to market data.
FROM SILENT VIDEOS TO THE TOP
Khaby Lame, an Italian content creator of Senegalese descent, rose to global prominence through silent TikTok videos that playfully mock complex “life hack” videos. He is now the most-followed TikTok creator in the world, with over 160 million followers.
The planned agreement envisioned Rich Sparkle issuing 75 million new shares to Lame in exchange for his intellectual property rights, valuing those shares at a reference price of $13. However, this valuation can only be realized if the shares locate buyers in the market.
Rich Sparkle previously focused on financial distress and documentation services, and aims to fundamentally reshape its business model following the merger. The company plans to create an AI-powered digital avatar of Khaby Lame to facilitate brand collaborations and product sales on social media.
Company projections suggest this avatar could generate up to $4 billion in annual product sales. Experts, however, note that this target is ambitious.
DEPENDENCE ON A SINGLE PERSON
“Normally, you’d have a lot more detail about the asset being acquired. Here, the entire value of the company is tied to one person and the business around him,” said Paul Nary, a management professor at the Wharton University, noting the limited publicly available financial information about the company.
While the deal has not yet been approved by Nasdaq or formally completed, the share decline has not directly impacted Lame’s net worth at this time. Neither party has issued an official statement regarding the situation.
CHINA MODEL TO BE BROUGHT TO THE WEST
Digital avatars have become a significant part of live-stream e-commerce, particularly in China. AI avatars used on platforms like Baidu, JD.com, and Alibaba’s Taobao can generate millions of dollars in sales during a single broadcast.
However, experts say that the U.S. And European markets do not yet have the same scale of live commerce as China. By comparison, U.S.-based live streaming platform Whatnot reached a total sales volume of $8 billion in 2025. Rich Sparkle’s estimate suggests Khaby Lame could generate nearly half that amount in sales alone.
INDIRECT IPO
Khaby Lame’s public offering is being carried out through a “reverse merger” rather than a traditional IPO. This method involves a private company merging with a company already listed on the stock exchange to go public indirectly.
“Reverse mergers are cheaper but more risky for investors,” according to Tim Loughran, a finance professor at Notre Dame University.
Several influencer-focused companies that have gone public using a similar method have previously experienced significant value losses and delisting from the stock exchange.
