Gemini Space Station (GEMI.O) shares surged more than 20 per cent in premarket trading on Friday after the New York-based cryptocurrency exchange reported a smaller-than-expected quarterly loss. The company, which facilitates the buying, selling, and storing of digital assets, also benefited from its founders injecting $100 million into the business. Gemini’s shares, initially priced at $28 in their IPO, had closed at $5.26 on Thursday, having lost considerable ground since their debut.
The significant investment, announced late Thursday, was made by Winklevoss Capital Fund at $14 per share, with payment in bitcoin. The fund, owned by Cameron and Tyler Winklevoss, is their family office and primary vehicle for venture capital and crypto investments. For the three months ended March 31, Gemini posted a net loss per share of 93 cents, outperforming analysts’ expectations of a $1.03 loss, according to LSEG estimates. Quarterly revenue surged 42 per cent to $50.3 million from a year earlier, driven by growth in its services and OTC platform revenue.
Despite these positive figures and founder support, analysts remain cautious. Evercore analyst Adam Frisch suggested that “were it not for the founders’ $100 million strategic investment, we think Gemini would likely be down on the print.” He pointed to key metrics like user and revenue reacceleration falling short of pre-IPO expectations, while CEO Tyler Winklevoss contended the market has “significantly undervalued Gemini.” The company’s results emerge against a turbulent backdrop, including a shareholder lawsuit alleging investors were misled and a strategy shift involving job cuts and executive departures. Gemini recently cut about 25 per cent of its workforce and parted ways with its chief operating, financial, and legal officers. Frisch also noted Gemini has not yet provided revenue guidance, limiting investor visibility into its push into predictions and derivatives.
