Why The World’s Biggest TikTok Star’s US$975 Million Business Deal Is Suddenly Falling Apart

This article, written by Amaya Nichole, was originally published on Inc.com.

TikTok’s top influencer struck a landmark deal that would have let retail investors buy a stake in his business for the first time, but months later, it’s unraveling.

Khaby Lame is a Senegalese-Italian influencer who’s known for silent comedy videos in which he responds to overly complicated life hack videos with a deadpan expression and a simple gesture.

“It is accessible to more people than if I would make my videos in English. I speak a universal language that everyone understands,” he told Forbes in Italian.

Now, with more 160 million followers, his influence has gone beyond the social media platform as he’s secured deals with brands like Airbnb, Fortnite, and Hugo Boss.

In January, Lame announced a US$975 million merger with Rich Sparkle Holdings, a Hong Kong-based company focused on Web3 technology and the creator economy, that would deliver a significant payday while allowing everyday investors to buy a stake in his business.

This would put him in the elite ranks of the creator economy. Unlike MrBeast’s company, which is valued at around $5 billion but private, Lame’s would be publicly traded and open the door to retail investment in an individual creator for the first time.

In exchange for its intellectual property, Lame’s company would receive stock in Rich Sparkle, and the deal made Lame’s payout dependent on its share price.

The announcement generated significant buzz among creator economy insiders, who viewed it as a validation of the industry’s value. Day traders quickly moved in, snapping up shares in the company Lame would list under, which sent Rich Sparkle’s stock surging.

“It started the upward climb all the way up to $180, and I was like, ‘Oh, should have held,’ ” Eric Moore, a day trader who sold his Rich Sparkle shares before the deal was announced, told Business Insider.

A big part of the deal’s predicted success rested on Rich Sparkle saying it planned to create and have the rights to an AI avatar of Lame to do brand deals and sell products on social media. Digital avatars, which can sell around the clock, are booming in e-commerce in China.

However, Lame’s deal has run into trouble. Questions mounted over whether the agreement had actually closed since Rich Sparkle called it “completed” in a January press release, yet no formal filings have confirmed that the deal was completed or that Lame’s company received the shares it was promised.

Additionally, an earlier filing stated the agreement would become void if these conditions were not satisfied or waived by February 28.

As a result, the stock has plunged more than 90 percent from its high amid confusion over the deal’s future in the past four months. Several major brokerages have also moved to restrict or block trading in the stock—with Interactive Brokers listing it as non-tradable and ETrade, Merrill Lynch, Fidelity, Charles Schwab, and Vanguard either blocking or limiting online trading—while Robinhood and Webull continue to allow trading as normal.

James Angel, a finance professor and Financial Industry Regulatory Authority (FINRA) program director at Georgetown University, told Business Insider that because of how foreign-registered companies file disclosures in the US, it could take months before the deal’s true status becomes clear to retail investors.

Those prospects matter for where the share price will settle, which will determine Lame’s potential windfall and could impact broader perceptions of creator-fronted businesses.

Although Lame has removed Rich Sparkle’s stock ticker from his social media bios, he hasn’t publicly spoken about the deal since January.