By John Meyer, consultant in financial affairs – Eurasia Business News, August 30, 2024. Article n°1199.
In 2023, Telegram’s revenues amounted to $342 million, total losses – $173 million Durov said in March that investors valued the platform at $30 billion before a possible IPO, but the process in France jeopardizes plans.
Telegram’s revenue for 2023 was $342 million, the Financial Times reports, citing the company’s previously unpublished financial statements. Operating expenses were $108 million, and the total loss was about $173 million after taxes.
In March, the founder of the messenger, Pavel Durov, said in an interview that he was considering the possibility of an IPO, and potential investors valued the platform at $30 billion.
Now, experts warn that Durov’s trial in France jeopardizes Telegram’s plans to go public in the next two years if advertisers are unwilling to spend money on the platform, which is now linked to the alleged distribution of illegal material (as reported by the French prosecutor’s office, Durov has been charged, among other things, with refusing to cooperate with the authorities, complicity in operating an online platform to carry out illegal transactions, drug trafficking and fraud as part of an organized group). “You’ll just be left with crypto scammers and ads for quick weight loss,” one of the FT’s interlocutors said.
According to the FT, Telegram is fully owned by Durov. Telegram has never published details about its ownership structure. The Russian-French businessman owns a multibillion-dollar fortune in cryptocurrency, and the company has raised about $2.4 billion in debt financing maturing in 2026. It includes the placement of bonds for $1 billion in 2021, among the investors were Abu Dhabi sovereign funds. In March, Pavel Durov said that Telegram had issued bonds worth $330 million, according to the company’s report, cited by the FT, the entrepreneur himself purchased bonds worth at least $64 million.
In 2021, official advertisements appeared in telegram channels, Durov explained that the income from them would allow the messenger “to continue to provide users with a free and unlimited service.” This spring, Telegram launched a channel monetization program; the function became available to owners in July, but soon the corresponding section, which reflected the balance of revenues for advertising in the internal currency of Telegram Stars, disappeared from Russian users.
Earlier this week, the price of Telegram Group’s Eurobond on the over-the-counter market fell by 10%, to $856.80, after Durov’s detention at Paris’ Le Bourget airport on August 24. At the end of trading on Friday, August 23, its price was $956.25. Bondholders will be able to convert senior unsecured debt into equity with a discount of 10 to 20% from the price of Telegram’s IPO, provided that the placement takes place before the end of March 2026, the FT wrote earlier.
“Will investors participate in the IPO if they believe that Telegram is a pariah? I’m not sure. Bond investors will face a similar dilemma,” one of the holders of Telegram securities told the newspaper. According to another bondholder, he did not receive any messages from the company after Durov’s detention.
Experts told Eurasia Business News that they expect that the Durov case will have a negative impact on Telegram bond quotes, because the company is built largely around the personality of its creator. “Bonds can “fall” by 2-3 percentage points, maybe even by 5 percentage points. But this is a debt, and Telegram Group serves the debt, so the risk is not very large,” said Alexander Butmanov, an expert on exchange strategies. He suggested that the IPO could be postponed until 2026.
Durov was in custody for four days. On August 28, after charges were filed, the businessman was released on bail of € 5 million, banned from leaving France and ordered to report to the police twice a week.
Arrested at the airport Le Bourget on August 24, at 08:00 PM, the French-Russian businessman himself does not admit guilt, and the French President Emmanuel Macron notes that there is no politics in this investigation.
After the detention of the businessman, Telegram said that the company complies with EU laws, and its moderation meets industry standards. The position of the French authorities that the platform or its owner is responsible for abuses in the messenger was called absurd in Telegram.
Pavel Durov’s net worth is currently estimated at $15.5 billion as of August 2024. This makes him the 150th wealthiest person in the world.
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The encrypted messaging Telegram was launched in 2013, and in 2022, the messenger surpassed WhatsApp for the first time in terms of user traffic.
Telegram’s Russian audience grew by almost 10 million people during 2024. In June 2023, the number of users was 52 million, and in June this year, 61 million.
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© Copyright 2024 – Eurasia Business News. Article no. 1199.
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