Embattled news startup Messenger is fighting for its life this week as co-founder and CEO Jimmy Finkelstein scrambles to secure funding to stay afloat.
Employees will learn their fate within the next 48 hours as they prepare for the worst, according to an insider familiar with the matter.
“Expectations are not high in the newsroom,” the person said. “It’s a banana.”
Sources say Finkelstein is working on closing “multiple deals” that need to close “as soon as possible” to avoid the company’s closure by the end of the week.
A representative for Messenger declined to comment.
Earlier this month, a group of conservative media and business executives led by investor Omeed Malik, who backed Tucker Carlson’s new media venture, offered $30 million for a 51% stake in the news site, at a valuation of It was estimated at $60 million.
At the time, media critics balked at this assessment given Messenger’s meager web traffic and dire financial situation.
The deal includes funding from Republican political operative Garrett Bentley and Ryan Coyne, founder of digital media agency Starboard. George Farmer, Parler’s former CEO and director of Britain’s conservative news network GB News, will ask Finkelstein to relinquish control.
The Messenger, which launched in May with $50 million, had big dreams of becoming a major centrist news organization, employing about 550 journalists and generating more than $100 million in revenue by 2024.
Earlier this month, Messenger shot down reports that it was considering shutting down due to a lack of funding.
Still, sources told the Post the site had just 12.5 million unique visitors in November, an increase compared to the site’s recently departed president, Richard Beckman. That’s far less than his 100 million monthly readership and $100 million in revenue. told the New York Times Last March.
Beckman, an executive known for aggressively increasing advertising revenue, warned employees in October that the site was running out of money. He resigned earlier this month, and people familiar with the matter told the newspaper that he and Finkelstein had “disagreements” over the direction of the business.
The company ultimately employed 300 staff, but said it had a net loss of $43 million in 2023 and recently laid off 20 employees to cut costs. Leaked pitch deck recently obtained by CNBC.
The site earned $2 million in revenue from direct ads and $1.8 million from programmatic ads last year, according to documents. Most of the company’s rapid cash burn was related to spending $39 million on hiring, the documents said.
Other expenses include more than $240,000 per month in rent for offices in New York, Washington, D.C., and West Palm Beach, Fla., and more than $1.7 million in travel, dining, and entertainment expenses by the end of 2024. Swells up.
The company also said that without additional investment, Messenger expects its ending cash balance through June to be negative $16 million.
The Messenger has had a bumpy ride during its short-lived existence.
After the site’s launch, journalists began fleeing Messenger and joined the site to do their own reporting, but mostly they were collecting clickbait news articles to drive traffic to earn advertising dollars. I was dissatisfied with that.
The site’s journalists are also upset about Finkelstein’s close relationship with Donald Trump, and have removed articles about the former president’s civil fraud trial in New York to avoid overwhelming the homepage. He questions the editor’s instructions to do so. Semaphore reported.
