Struggling news startup Messenger is reportedly in talks with a group of conservative media and business executives. Axios reported late Thursday..
The group is offering $30 million for a 51% stake, which would increase the struggling news site's valuation to $60 million, the paper said. The deal requires founder and CEO Jimmy Finkelstein to relinquish control.
Axios also reported that Messenger, which laid off nearly 20 of its 300 employees as its cash reserves dried up, raise $20 million To stay afloat.
As for the investor group, Axios said it met with Mr. Finkelstein at Mar-a-Lago, a private club and former President Trump's residence in Florida.
Among them are Omeed Malik, the investor who backed Tucker Carlson's new media venture, Republican political operative Garrett Bentley, Ryan Coyne, founder of digital media agency Starboard, and British conservative This included former Parler CEO George Farmer, a member of the group's board of directors. News Network, GB News.
Neither Messenger nor the group responded to requests for comment.
According to Axios, the group claims the investors have “no interest in getting involved in the company's editorial activities” but are seeking to grow the company's revenue beyond driving advertising traffic. .
Still, a deal would likely create friction within newsrooms that adhere to a creed of reporting the news in a bipartisan manner. Staffers are already exasperated by Mr. Finkelstein's close relationship with Mr. Trump.
Last month, Mr. Finkelstein told editors to remove articles about Mr. Trump's civil fraud trial in New York to avoid overwhelming the homepage and causing a firestorm in Messenger. Semaphore reported.
Meanwhile, the company, which was launched in May with a $50 million investment, has struggled to gain traction, generating less than $5 million in revenue last year and not making a profit, according to Axios.
Officials said the site had just 12.5 million unique visitors in November, compared to what Richard Beckman, the site's president, told The New York Times earlier this year about 100 million monthly readers and 100 million yen in revenue. Much less than a dollar.
Mr. Beckman announced his departure from the company on January 31, citing “short-term” health issues, but sources told the paper that Mr. Beckman's vision for the outlet also clashed with Mr. Finkelstein's. He said he did.
Following news of Beckman's departure and layoffs at the company, Semaphore reported that the site will close by the end of this month without an infusion of cash.
A representative for the Messenger condemned the report, calling it “beyond absurd.”
“We have already secured investment as part of our second round of funding, so the idea of discussing closure is completely absurd,” a representative told the Post.
Meanwhile, inside Messenger, employees are reeling from a spate of bad news and looking to Finkelstein and editor-in-chief Dan Wakeford for answers, but answers are hard to come by.
On Thursday, Messenger's head of communications tried to calm staff through an internal Slack channel, telling them that Finkelstein would be holding a meeting with employees in the next few days, Mr. T said.The Daily Beast first reported.
