In January, TikTok star Khaby Lame announced a partnership that would test the viability of his personal brand on the stock market. Three months later, that deal is looking like a dud.
Lame sold a stake in his company, Step Distinctive Limited, to a financial printing company called Rich Sparkle Holdings. The Hong Kong-based firm had big plans for its partnership with TikTok’s most-followed creator: There was talk of brand endorsements, TikTok Shop activations, and even an AI version of Lame’s likeness. The size of the $975 million, all-stock deal suggested that the creator economy had grown big enough for individual stars to accrue massive valuations.
It only took a few days before skepticism started to swirl around the deal. Financial experts raised red flags regarding the volatility of Rich Sparkle’s stock price, and things have only gotten more dubious since then.
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According to Business Insider, Rich Sparkle stock has declined by 90% since January. There have been no formal filings to indicate that the deal is officially done, and Rich Sparkle has not responded to Business Insider‘s requests for comment.
In response to that uncertainty, brokeragess like E-Trade, Merrill Lynch, Fidelity, Charles Schwab, Vanguard, and Interactive Brokers have either blocked trading on the stock or placed restrictions on it. “Brokers feel they are doing their customers (as well as their back offices) a favor by not letting customers buy [the stock],” Georgetown University finance professor and FINRA Program Director James Angel told Business Insider.
Lame’s reaction to all of this mess has been the equivalent of one of his famous shrugs. He has not offered a public comment on the stock’s downturn, nor has he confirmed whether his company has received the 75 million Rich Sparkle shares it was meant to obtain via the deal. He removed the financial firm’s stock ticker from his Instagram and TikTok bios.
The ongoing saga is the latest cautionary tale related to creator forays into global stock markets. FaZe Clan’s IPO was so disastrous that the gamer network is now a shell of its former self. As for “Baby Shark” owner Pinkfong, the South Korean media company has seen its stock price cut in half since last year’s IPO.
Even if the Rich Sparkle deal proves financially calamitous, Lame’s career is far from over. He still has more followers than any other TikToker, and he recently landed a gig as an ambassador for the Youth Olympic Games in Dakar, Senegal. Unfortunately, he may have also learned a painful truth other creators have discovered in the past. When you make a lot of money online, third parties will want a piece of the action, and not all of them have their partners’ financial futures in mind.
