TikToker Khaby Lame's $975 million deal is riding on a crashing stock

• TikToker Khaby Lame's $975 million deal is looking increasingly shaky.
• The stock price of a company he's seeking a merger with has fallen from a peak of over $180 to $11.19.
• The company is pitching investors on using an AI clone of Lame to drive billions in e-commerce sales.

TikTok superstar Khaby Lame's $975 million deal is getting squeezed.

Hong Kong-based Rich Sparkle Holdings last month unveiled plans to merge with Lame's social media and e-commerce business.

The deal made Lame's payout dependent on Rich Sparkle's share price, which has plunged to $11 as of market close on Thursday from a high of $180 last month.

Lame, a Senegalese-Italian creator, built a following with dialogue-free videos mocking overly complicated life hacks, like using a gadget to open a soda can instead of just popping the tab. He is now the world's top TikTok influencer with over 160 million followers.

As part of the deal, Rich Sparkle — formerly a financial printing company — planned to create an AI avatar of Lame to do brand deals and sell products on social media while earning a commission. Rich Sparkle projected Lame's avatar could drive as much as $4 billion in annual product sales.

In return for its IP, Lame's company would get 75 million new shares in Rich Sparkle, valued at $13 each. (That $13 is a guide. Someone actually has to buy the shares for Lame and his team to cash out. So, if the share price of Rich Sparkle tumbles, the value of Lame's stake will fall as well. The same is true if it goes up.)

Rich Sparkle's drop-off isn't affecting Lame's current wealth, as there have been no formal filings indicating that the deal has closed or been approved by the Nasdaq. Lame and representatives for Rich Sparkle did not respond to requests for comment.

Paul Nary, a management professor at Wharton, said it's hard to know what will happen next.

Public details about the business are scarce, and the company's value — based on a projection of how much Lame's fame could be worth — is hard to assess. If Lame's team and Rich Sparkle shared more financial information, it could boost confidence in the company, Nary said.

"Normally, you'd have more specifics on the asset being acquired," he added. "The entire value of the company depends on that person and his related ventures."

Wait, a digital clone?

Using a digital clone of Lame to sell stuff may seem like a wildly futuristic idea. However, digital avatars are becoming increasingly common in the influencer e-commerce playbook, particularly in China.

Chinese platforms like Baidu, JD.com, and Alibaba's Taobao have become hubs for digital avatars to sell on livestreams. AI clones of celebrities or influencers can pull in millions of dollars in a single livestream. The avatar for one Chinese influencer, Luo Yonghao, drove over $7 million in sales during a more than 6-hour selling session last year, CNBC reported.

While humans can appear more authentic to viewers, AI avatars can sell 24 hours a day without breaks and answer viewers' questions in real time.

"After an hour, you start to lose your concentration, you start to lose your voice," said Alexandre Ouairy, Director of PLTFRM, a marketing, advertising, and e-commerce agency in China. "A machine will continue speaking nonstop."

Lame doesn't narrate any of his videos, which could make it even easier for his digital avatar to succeed.

"He's got a great following, but it doesn't translate to a parasocial relationship like Mark Rober or Jimmy Donaldson does," said Jim Louderback, a creator economy advisor, name-checking the popular science influencer and creator behind MrBeast. "Because the character he built on TikTok is separate from himself, if he decides to pull back, his character lives on in the digital twinning."

Rich Sparkle's plan, in partnership with a Chinese marketing agency known as Three Sheep Group, is to use Lame's likeness to craft brand deals and sell products on apps like TikTok Shop, primarily in the US, the Middle East, and Southeast Asia.

As avatars become "the latest style of livestreaming in China," a lot of Chinese companies believe they can "copy the same format and do it in other countries," said Ophenia Liang, cofounder of the agency, Digital Crew, which helps Western brands break into the Chinese market.

No matter how skilled Lame's partners are at cloning his likeness, it still may be very hard to translate his fame into $4 billion in annual live-commerce sales, the figure that Rich Sparkle said it could hit in its acquisition announcement, the marketers said.

Whatnot, a buzzy platform focused on livestream commerce in the US and a few other markets, said it drove a total of $8 billion in 2025 product sales, as measured by gross merchandise value (GMV). Rich Sparkle's estimate suggests that Lame himself could drive sales equal to half that entire platform.

Sales on other top US social commerce platforms like TikTok Shop are growing quickly, but are still a far cry from those in the Chinese market. During the busiest four-day stretch of the holiday shopping season last year, TikTok Shop said its total US sales were around $500 million.

"Using his digital clone, there would be good revenue," Liang said of Lame, but he's unlikely to drive $4 billion in sales.

Influencer-fronted public companies have struggled

While the influencer economy is a buzzy category among investors, it has yet to produce an enduring IPO success story, aside from social media giants like Meta and Reddit.

That isn't stopping some creators from dreaming of going public. MrBeast's team has hinted at plans to IPO, for example. The top YouTuber's company was valued at around $5 billion in its latest funding round.

Lame is looking to enter the public markets through a reverse merger. That's when a private company goes public by merging with an existing public company, often called a shell. In this case, the shell is Rich Sparkle, incorporated in the British Virgin Islands, with its main financial printing business based in Hong Kong. It reported $6.2 million in revenue in its 2025 fiscal year.

A reverse merger can be a way to access public markets with less time, cost, and scrutiny than a traditional IPO.

"I always think of reverse mergers as a poor man's IPO, because I don't have to spend all this money to get listed, and it's much cheaper than going through the IPO process," said Tim Loughran, a professor at the University of Notre Dame's Mendoza College of Business. "For investors, they should be wary."

Other creator economy firms have opted for reverse mergers to list on public markets, including the video app Triller and the Los Angeles influencer collective Clubhouse Media Group. Clubhouse shrunk down to a penny stock and is now traded over the counter. Triller was delisted by the Nasdaq in December after failing to file its SEC paperwork on time. Its market cap has fallen over 90% from its first day of trading.

One risk of running an influencer-fronted public company is reliance on a single personality to drive revenue.

Gaming and esports company FaZe Clan, which went public in 2022 via a special-purpose acquisition company valued at $725 million, relied on one creator for about 20% of its revenue. It sold itself in 2023 for a fraction of its SPAC price, and its influencer business later unraveled in late 2025 after many of its top talent left abruptly amid a contract dispute.

"It would be very difficult to have an IPO for a company that's based entirely on an influencer and personality," Wharton's Nary said. "This is precisely a case of an asset that would be very hard to value and take through a standard IPO process. Having a key man risk, it's tough."

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