Telegram's new move: plans to issue $1.5 billion in bonds, will integrate Musk's xAI and obtain equity and subscription revenue share.

Compiled by: Felix, PANews

On May 29, according to informed sources, the instant messaging application Telegram will raise at least $1.5 billion through the issuance of bonds. In addition, Telegram's founder announced that a $300 million deal has been reached with Musk's xAI (not yet finalized).

Driven by a series of positive news, the native token TON of The Open Network, owned by Telegram, saw a brief surge in price. According to CoinGecko data, Toncoin (TON) once soared to around $3.7, an increase of about 23%, and is currently reported at $3.32. Although Musk later clarified that no formal agreement has been signed, the price has retraced somewhat, yet the 24-hour increase still reached 11.2%.

Propose to issue bonds to raise 1.5 billion dollars

Insiders reveal that Telegram will issue a five-year bond with a yield of 9%. The company plans to use the proceeds from this bond to buy back its remaining bonds issued in 2021, which will mature in March next year. The company had previously repurchased about $400 million of such bonds in cash.

Investors include existing Telegram bondholders, such as U.S. asset management firm BlackRock and Abu Dhabi sovereign wealth fund Mubadala. New investors are expected to include hedge fund firms like Citadel.

Similar to the bonds previously issued by Telegram, if the company decides to go public, investors in the new bonds can choose to convert their debt into equity at a discount. However, given the legal uncertainties facing founder Pavel Durov and market volatility, it is unlikely that the company will conduct an IPO in the short term.

By reaching a cooperation intention with xAI, one can obtain shares and subscription revenue sharing.

In addition to the planned issuance of $1.5 billion in bonds, Pavel Durov stated on the X platform that Telegram will also gain a new source of income: a one-year agreement to distribute Musk's xAI artificial intelligence model Grok (integrating the Grok chatbot into Telegram). In return, Telegram will receive $300 million in cash and equity in the AI company, as well as 50% of the subscription revenue from xAI sold through Telegram.

In addition, Pavel Durov emphasized privacy. Some users expressed: "I hope user data can remain secure." In response, Pavel Durov stated: "User privacy is crucial. It should be clear that xAI will only access data that Telegram users explicitly share with Grok through direct interaction."

It is worth mentioning that later that day, Musk denied the statement, replying that "no agreement has been signed yet." Following the news, the price of the TON token fell accordingly. In response, Pavel Durov said, "That's right, we agree in principle, but the formal procedures are yet to be completed."

The founder is embroiled in an investigation, but revenue momentum is strong.

Pavel Durov was born in Russia and holds citizenship in Russia, the UAE, and France. In August 2024, Pavel Durov was arrested in France for failing to assist the police in combating crime and is under investigation in France. Although Pavel Durov has been released on bail, he is not allowed to leave France without permission during the investigation.

Pavel Durov applied for a special exemption on May 12 to travel to the United States for negotiations with investors, but French prosecutors stated that the request was denied because the reasons for his trip were "neither convincing nor reasonable." It is currently unclear how long Pavel Durov will be detained in France.

It is worth mentioning. Despite the legal risks faced by founder Pavel Durov, Telegram's development has not been affected much.

According to informed sources, Telegram has informed investors that its revenue for 2024 is expected to be $1.4 billion, with a profit of approximately $540 million, marking a significant rebound from the previous year's lackluster performance. In 2023, Telegram's revenue was $342 million, with a loss of $173 million.

In addition, Telegram executives stated that by March 2025, Telegram will have 1 billion active users, with over 15 million paying users, which has doubled in the past year. It is expected that revenue will reach 2 billion dollars in 2025, with profits exceeding 700 million dollars.