Is TON a savior or a source of risk? The emerging concerns behind Telegram's rapid growth

Author: Zen, PANews

Telegram has recently once again come into the spotlight due to a financial report sent to investors: revenue is trending upward, but net profit is heading downward. The key variable here is not user growth slowing down, but the downward price movement of TON, which has “penetrated” asset volatility into the profit and loss statement. Selling over $450 million worth of TON tokens has prompted the outside world to reevaluate the profit relationship and boundaries between Telegram and the TON ecosystem. Despite TON’s low price, Telegram’s revenue surged but still posted a net loss According to FT reports, in the first half of 2025, Telegram achieved a significant jump in revenue. Unaudited financial statements show that the company’s revenue for the first half of the year reached $870 million, a 65% increase year-over-year, far exceeding the $525 million in the first half of 2024; operating profit was nearly $400 million. Looking at the revenue structure, Telegram’s advertising revenue grew by 5%, reaching $125 million; premium subscription income soared 88%, reaching $223 million, nearly double that of the same period last year. The key driver of this revenue growth mainly comes from an exclusive agreement signed with the TON blockchain—TON became the exclusive blockchain infrastructure for Telegram mini-program ecosystem, bringing in nearly $300 million in related income. Therefore, overall, Telegram continued the strong growth momentum from the mini-game boom in the first half of 2024— in 2024, Telegram achieved its first annual profit, with a profit of $540 million, and total revenue reaching $1.4 billion, significantly higher than $343 million in 2023. Of the $1.4 billion revenue in 2024, about half came from its so-called “partnerships and ecosystem,” roughly $250 million from advertising, and $292 million from its premium subscription services. Clearly, part of Telegram’s growth benefits from the surge in paying users, and even more from its cryptocurrency-related collaborations. However, the high volatility of cryptocurrencies also poses risks for Telegram. Even with nearly $400 million in operating profit in the first half of 2025, Telegram still reported a net loss of $222 million. Insiders say this is because the company had to revalue its holdings of TON tokens. Due to continued weakness in competing coins in 2025, the price of TON tokens kept falling, with a decline of over 73% at the lowest point. Selling $450 million—cash-out or adhering to decentralization? Accustomed to the long-term stagnation of competing coins’ prices and the unrealized losses of many DAT-listed companies, retail investors are not surprised by Telegram’s losses due to virtual asset depreciation. More upsetting and controversial within the community is FT’s report that Telegram has sold TON tokens on a large scale, with sales exceeding $450 million. This figure accounts for over 10% of the token’s current circulating market cap. As a result, the continuous decline in TON’s price, combined with Telegram’s handling of its large token holdings, has sparked doubts and disputes among some TON community members and investors about “selling tokens for cash” and betraying TON investors. According to Manuel Stotz, Chairman of TONStrategy (Nasdaq: TONX), the company managing TON’s treasury, all TON tokens sold by Telegram are set with a four-year phased unlock. This means these tokens cannot be traded on the secondary market in the short term, preventing immediate selling pressure. Additionally, Stotz stated that the main buyers connected with Telegram are long-term investors led by TONX. Their purchase of these tokens is for long-term holding and staking. As a publicly listed TON ecosystem investment firm in the US, TONX’s acquisitions of Telegram tokens are primarily for long-term strategic purposes, not for speculative quick flips. Stotz also emphasized that Telegram’s net holdings of TON tokens have not significantly decreased after the sales; in fact, they may have increased. This is because Telegram has used part of its inventory to unlock locked tokens and continues to earn new TON income from business activities like advertising revenue sharing, maintaining a high overall holding. Telegram’s long-term business model of holding TON tokens has previously raised concerns within the community—holding an excessively high proportion of tokens is seen as detrimental to TON’s decentralization. Telegram founder Pavel Durov has taken this seriously, stating as early as 2024 that the team would keep Telegram’s TON holdings below 10%. If holdings exceed this threshold, the excess would be sold to long-term investors to promote broader distribution and raise funds for development. Durov emphasized that these sales would be conducted at a slight discount below market price, with lock-up and vesting periods to prevent short-term dumping, ensuring the stability of the TON ecosystem. This plan aims to prevent TON from becoming too concentrated in Telegram’s hands, which could lead to price manipulation concerns, and to uphold the project’s decentralization principles. Therefore, Telegram’s token sales are more like asset restructuring and liquidity management rather than simple profit-taking from high prices. It is worth noting that the continued decline of TON’s price in 2025 has indeed put pressure on Telegram’s financial statements, but in the long run, Telegram’s close ties with TON also create a mutually beneficial and risky situation. Telegram’s deep involvement in the TON ecosystem has generated new revenue streams and product highlights, but it also exposes the company to the financial impacts of crypto market volatility. This “double-edged sword” effect is a factor investors must consider when evaluating its potential IPO. Telegram’s IPO prospects With improved financial performance and diversified business, Telegram’s listing prospects have become a focus of market attention. Since 2021, the company has raised over $1 billion through multiple bond issuances; in 2025, it issued another $1.7 billion in convertible bonds, attracting participation from international institutions like BlackRock and Mubadala of Abu Dhabi. These financing measures not only provide capital for Telegram but are also seen as preparations for an IPO. However, the path to listing is not smooth—its debt arrangements, regulatory environment, and founder-related factors will influence the IPO process. Currently, Telegram has two main bonds outstanding: one is a 7% coupon bond maturing in March 2026, and the other is a 9% coupon convertible bond maturing in 2030. Of the $1.7 billion in the second bond, approximately $955 million is used to refinance old bonds, and $745 million is new capital for the company. The convertible bond features an IPO conversion clause: if the company goes public before 2030, investors can redeem/exchange at about 80% of the IPO price, equivalent to a 20% discount. In other words, these investors are betting on Telegram’s successful IPO and substantial valuation premium. Currently, Telegram has already repaid or redeemed most of the bonds due in 2026 through the 2025 debt refinancing. Durov publicly stated that the old debt from 2021 has been mostly paid off and does not pose current risks. Regarding the impact of the $500 million Russian bonds being frozen, he responded that Telegram does not rely on Russian capital; none of the recent $1.7 billion bond issuance involves Russian investors. Therefore, Telegram’s main remaining debt is the 2030 convertible bonds, leaving a relatively wide window for listing. However, many investors still expect Telegram to seek a listing around 2026-2027, to convert debt into equity and open new financing channels. Missing this window could mean long-term debt interest pressures and losing the opportunity for equity-based financing. When evaluating Telegram’s listing value, investors also focus on its profitability prospects and fee-sharing models. Currently, Telegram has about 1 billion monthly active users, with an estimated 450 million daily active users, providing a large user base with commercial potential. Although its business has grown rapidly in recent years, Telegram still needs to prove that its business model can sustain profitability. The good news is that Telegram currently has absolute control over its ecosystem. Durov recently emphasized that the company’s only shareholder remains himself, and creditors are not involved in governance. Thus, Telegram might sacrifice some short-term profits to foster long-term user stickiness and ecosystem prosperity without being constrained by short-sighted shareholders. This “delayed gratification” strategy aligns with Durov’s consistent product philosophy and will be central to telling its growth story to investors during the IPO process. However, it should be noted that an IPO depends not only on financial and debt structures. FT pointed out that Telegram’s potential listing plans are still affected by ongoing legal proceedings against Durov in France, and related uncertainties make the timeline unclear. Telegram has also acknowledged in communications with investors that this investigation could pose an obstacle.