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Khaby Lame Deal Sparks Market Frenzy
31 Jan
Summary
- Khaby Lame's $975 million deal faced market scrutiny.
- Rich Sparkle's stock surged over 650% then dropped 77%.
- Experts questioned the deal's sustainability and business shifts.
A significant Rs 8,980 crore ($975 million) all-stock transaction involving TikTok star Khaby Lame is now under intense review by market experts. Lame's company, Step Distinctive Limited, which manages his global brand, was sold to Rich Sparkle Holdings, a Hong Kong-based public firm.
Following the deal's revelation earlier this month, Rich Sparkle's stock experienced a dramatic surge, climbing more than 650% to reach $180.64 per share by January 15. This valuation briefly placed Lame's stake around $6.6 billion. However, the stock has since seen a sharp decline, falling as low as $41, a drop of up to 77% from its highest point.
This volatility has led financial professionals to question the deal's long-term viability and the company's strategic pivots. Securities attorney Brenda Hamilton noted that Rich Sparkle's prospectus initially outlined one business focus, but the company quickly shifted to a different sector, issuing substantial shares that resulted in a change of control.
Rich Sparkle, initially listed on Nasdaq last July with a valuation under $50 million, reported less than $6 million in revenue for 2024 from designing and printing financial materials. The deal includes an exclusive 36-month operating partnership with Anhui Xiaoheiyang Network Technology Co., Ltd., for Lame's commercialization efforts.
Lame's company projects over $4 billion in annual sales from his fanbase, targeting the US, Middle East, and Southeast Asia. The agreement also permits the use of Lame's biometric data for AI Digital Twin development to create multilingual social media content. Khaby Lame, known for his silent comedy simplifying life hacks, has a massive following across Instagram and TikTok.
