Questions are swirling around a massive business deal linked to social media star Khaby Lame after an obscure Hong Kong company announced it had acquired a firm tied to the influencer — a move that sent its stock skyrocketing before crashing just as quickly.
Earlier this month, Rich Sparkle Holdings revealed in a filing with the U.S. Securities and Exchange Commission that it was buying Lame’s Step Distinctive Limited through an all-stock transaction valued at about $975 million. The company followed up with a press release claiming the deal had officially closed.
Rich Sparkle framed the acquisition as a bold pivot into influencer-led commercialization, promising to build an expansive business ecosystem centered on Lame. It also announced plans to develop an “AI Digital Twin” of the viral star and named him as a controlling shareholder.
According to Forbes, Rich Sparkle’s stock jumped more than 650%, briefly topping $180 per share. On paper, that surge appeared to hand Lame a multibillion-dollar stake due to how the shares were structured. But market experts say the numbers may be misleading, noting that the company has very few publicly traded shares, which can distort valuations.
The firm only went public last summer in a small Nasdaq IPO, selling just over one million shares at $4 each — valuing the company at roughly $50 million at the time. Its filings also show Rich Sparkle brought in under $6 million in revenue in 2024, mostly from printing financial documents.
That abrupt shift from a niche printing operation to a global influencer-driven venture, combined with extreme stock volatility, has raised eyebrows among legal and financial analysts.
Brenda Hamilton, a securities attorney at Hamilton & Associates Law, described the situation as concerning.
“It’s very suspect,” she said, pointing out that the company laid out one business strategy during its IPO, then quickly jumped into a completely different industry while issuing large amounts of new shares that altered control of the company. She added that sharp trading swings are often a “red flag,” especially when foreign companies are involved, as they can be harder for U.S. regulators and investors to properly examine.
More uncertainty comes from the fact that Rich Sparkle has yet to file a formal SEC document confirming the deal’s completion, despite publicly stating that it has 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 massive valuation seems to be driven largely by Lame’s social media reach rather than the company’s financial performance. Other experts shared similar 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 focuses on investor protection.
The rally didn’t last. Rich Sparkle’s stock later sank to around $41, plunging more than 75% from its high. Veteran short seller Jim Chanos of Chanos & Company didn’t mince words.
“This looks completely like a Chinese stock promotion,” Chanos said, referencing a familiar pattern in which little-known China-linked companies see sudden stock hype that inflates their market value despite weak fundamentals.
Lame, who has more than 160 million followers on TikTok and tens of millions more on Instagram, waited over a week after the announcement to publicly respond.
“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 has responded to requests for additional details or clarification about the deal.
