Telegram's new move: plans to issue $1.5 billion in bonds, will integrate Musk's xAI and obtain shares and subscriptions

Compiled by: Felix, PANews

On May 29, people familiar with the matter revealed that the instant messaging app Telegram will raise at least $1.5 billion through the issuance of bonds. In addition, the founder of Telegram announced that he had reached a $300 million deal with Musk's xAI (not yet finalized).

Driven by a series of good news, the price of TON, the native token of Telegram's The Open Network, soared in a short period of time. According to Coingecko data, Toncoin (TON) once soared to about $3.7, an increase of about 23%, and is now trading at $3.32. Although Musk later clarified that the agreement has not been officially signed, the price of the coin has fallen, but the 24-hour increase is still 11.2%.

Plans to issue bonds to raise $ 1.5 billion

Telegram will issue five-year bonds with a 9% yield, people familiar with the matter said. The company plans to use the bonds to buy back the rest of its 2021 bonds, which mature in March next year. The company has previously repurchased about $400 million of such bonds with cash.

Investors include existing Telegram bondholders such as U.S. asset manager BlackRock and Abu Dhabi state investment company Mubadala. New investors are expected to include hedge fund firm Citadel, among others.

As with Telegram’s previous bonds, investors in the new bonds will have the option to convert their debt into equity at a discount if the company decides to go public. However, given the legal uncertainty and market volatility facing founder Pavel Durov, an IPO is unlikely anytime soon.

If you reach a cooperation intention with xAI , you can get shares and subscription share

In addition to the proposed $1.5 billion bond issue, Pavel Durov said on the X platform that Telegram will also gain a new source of revenue: 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 artificial intelligence company, as well as 50% of the revenue from xAI subscriptions sold through Telegram.

In addition, Pavel Durov also emphasized privacy. One user said: "I hope user data can be kept safe." In response, Pavel Durov replied: "User privacy is of paramount importance. 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". After the news came out, the price of TON tokens fell. In response, Pavel Durov said: "Yes, it is agreed in principle, but the formal procedures have yet to be completed."

The founder is under investigation but revenue momentum is good

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

Pavel Durov had applied for a special exemption on May 12 to travel to the United States to negotiate with investors, but French prosecutors said the request was rejected because the reasons for his trip were "neither convincing nor reasonable." It is not clear how long Pavel Durov will be detained in France.

It is worth mentioning that despite the legal risks faced by founder Pavel Durov, the development of Telegram has not been greatly affected.

Telegram has told investors it will post revenue of $1.4 billion and profit of about $540 million in 2024, a sharp rebound from the previous year’s lackluster performance, according to people familiar with the matter. Telegram is expected to post revenue of $342 million and a loss of $173 million in 2023.

In addition, Telegram executives said that by March 2025, Telegram will have 1 billion active users and more than 15 million paying users, which has doubled in the past year. Revenue is expected to reach $2 billion in 2025, and profits will exceed $700 million.

Related reading: Telegram founder regains his freedom, TON officially announces VC buys $400 million in tokens, and the development dilemma may usher in a turning point