Telegram bonds drop in value after chief faces criminal inquiry

Telegram's financial report for 2023 shows that the company generated revenue of $342 million with an operating loss of $108 million, according to the Financial Times.

The messenger's total losses amounted to around $173 million after taxes. Moreover, according to the 2023 financial report, Telegram's CEO Pavel Durov personally acquired bonds worth at least $64 million.

• However, today it seems that the situation is much worse. The price of Telegram's bonds has dropped by almost 10 percentage points and is now around 87 cents.
• This results in a yield of over 16%, compared to around 96 cents before Durov's arrest on August 24.
• Consequently, Telegram's hopes for a profitable IPO have been jeopardized due to the criminal charges, FT reports.

FT emphasizes that bondholders of the company have suffered significant losses due to recent events:

The development is catastrophic for Dubai-based Telegram and its elusive chief executive, who has been trying to expand the business ahead of a possible stock market listing by 2026.

Pavel Durov stated that if Telegram achieves self-sufficiency, then an IPO might take place. The head of the messenger believed that this would happen in 2025, "if not earlier."

However, FT experts warn that any listing will be difficult if advertisers are unwilling to spend money on a platform currently associated with content involving child sexual abuse.

Then you’re going to be left with crypto scams and rapid weight loss adverts,

a person familiar with the business told the newspaper.

In March of this year, Telegram issued bonds worth $330 million. Previously, in March 2021, Telegram placed bonds worth $1 billion, in April of the same year—another $750 million, and in July 2023, another $270 million was issued.

One of the bondholders expressed skepticism about the situation in a conversation with FT:

Would investors buy into an IPO if they are not sure if Telegram is [a] pariah? I am not sure. Bond investors would face a similar dilemma. In either case, I would not expect a quick recovery of the bonds.

On the evening of August 28, the Paris court ruled to release the head of Telegram under supervision with a bail requirement of 5 million euros, an obligation to report to the police station twice a week, and a ban on leaving the country.