TON rose 23% in a single day; a brief overview of the latest developments from Telegram.

Compiled by: Felix, PANews

On May 29, according to informed sources, 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 a $300 million deal has been reached with Musk's xAI (yet to be finalized).

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

Proposed Bond Issuance to Raise $1.5 Billion

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

Investors include existing Telegram bondholders such as American asset management firm BlackRock and Abu Dhabi's sovereign wealth fund Mubadala. New investors are expected to include hedge fund companies 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 discounted price. However, given the legal uncertainties faced by founder Pavel Durov and the market volatility, the company is unlikely to conduct an IPO in the short term.

Reach a cooperation intention with xAI to 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 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 xAI subscription revenue sold through Telegram.

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

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

Founder Under Investigation but Revenue Momentum Strong

Pavel Durov was born in Russia and holds Russian, Emirati, and French citizenship. In August 2024, Pavel Durov was arrested in France for failing to assist police in combating crime and is currently 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 that although founder Pavel Durov faces legal risks, the development of Telegram has not been significantly affected.

According to informed sources, Telegram has informed investors that its revenue for 2024 is expected to be $1.4 billion, with a profit of about $540 million, marking a significant rebound from the previous year’s sluggish 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, having doubled in the past year. Revenue is expected to reach $2 billion in 2025, with profits exceeding $700 million.

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