"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."
"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."
Khaby Lame agreed to merge his social media and e-commerce business with Hong Kong-based Rich Sparkle Holdings in a deal valuing his payout at $975 million. The agreement granted Lame's company 75 million new Rich Sparkle shares, guided at $13 each, making his compensation tied to the acquirer's share price. Rich Sparkle's stock plunged from a high of $180 to $11, reducing the implied value of Lame's stake. Rich Sparkle planned to build an AI avatar of Lame to monetize brand deals and product sales, projecting up to $4 billion in annual sales. No Nasdaq approval or deal close has been filed.
Read at Business Insider
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