New filing deepens mystery of Khaby Lame's $975M deal as stock crashes 99%

The mystery around Khaby Lame's $975 million deal just got deeper, and the numbers are getting uglier. Nine months after TikTok's most-followed creator agreed to merge his business with publicly traded Rich Sparkle Holdings, a new financial filing shows the deal is still on ice, while the shell company's stock has collapsed 99% from its January peak. The stock, which shot to about $180 after the deal was announced on January 9, closed Thursday at $1.93. That means the 75 million shares Lame was promised, initially valued at $975 million, are now worth roughly $145 million, a paper loss of $830 million for the creator with over 160 million followers.

The September 30 filing, Rich Sparkle's first since March, describes the deal as conditional on a due diligence process, a minimum valuation of Lame's company, and stock exchange approval. That is the same language that has appeared in previous filings, offering no sign of progress. But the filing does contain one fresh and unusual detail: Rich Sparkle issued nearly $39 million in stock to its staff as compensation during the six months ended March 31, resulting in an operating loss of almost $40 million. In the year-earlier period, it issued no share-based compensation. The filing does not say which staffers received shares or exactly when they got them within that window, leaving open the possibility that some employees cashed in on the stock's massive spike following the Lame announcement.

The deal was celebrated across the creator economy when it was announced, and for good reason. Valuations of that size are rare among influencer-founded companies, and the merger would have given everyday investors an unusual chance to bet directly on a creator. Rich Sparkle, a Hong Kong-based financial printing firm, planned to create an AI avatar of Lame to do brand deals and sell products on social media, projecting more than $4 billion in annual product sales. The high profile of Lame, a Senegalese-Italian creator who rose to fame with dialogue-free comedy videos, meant the outcome could shape how investors assess the viability of backing businesses centered on individual creators.

But the deal has been in limbo since late January, when Lame went silent on the merger and removed Rich Sparkle's stock ticker, ANPA, from his social-media bios. Business Insider exclusively reported in April that several prominent brokerages had restricted or blocked trading in the stock, a red flag for retail investors who had piled in after the announcement. The stock's 99% collapse from its high is a stark reminder of how speculative these reverse-merger vehicles can be, especially when the underlying business is a single creator's personal brand.

Wharton management professor Paul Nary said the size of the share issuance was unusual relative to the company's valuation and revenue. The $39 million in stock compensation, which drove the operating loss, stands out because it came during the exact period when the stock was spiking. Without more disclosure, it is impossible to know whether the issuance was a routine retention move or something more opportunistic. The lack of transparency, combined with the frozen merger, leaves investors and observers guessing about what is actually happening inside Rich Sparkle.

Meanwhile, Lame has moved on, at least publicly. He continues to post for brands, recently made a cameo in the James Bond-inspired video game "007 First Light," signed on as a brand ambassador for travel eSIM company Holafly, and is promoting the Dakar 2026 Youth Olympic Games. None of that suggests he is waiting by the phone for the merger to close. Rich Sparkle and Lame did not respond to multiple requests for comment, and the September 30 filing offers no timeline for when, or if, the deal will proceed.

For creator-economy founders and investors, the saga is a cautionary tale about the gap between announced valuations and realized payouts. A headline-grabbing number like $975 million can generate buzz, but when the deal is structured as a reverse merger into a thinly traded shell, the risks are enormous. The stock's 99% plunge and the mysterious share issuance should force anyone considering a similar structure to ask hard questions about governance, disclosure, and what happens when the hype fades. For now, the only certainty is that Khaby Lame's biggest payday remains a promise on paper, and the paper is worth a lot less than it used to be.