Stock prices for Gemini Space Station jumped more than 20% during premarket trading Friday after the cryptocurrency platform posted quarterly losses that were smaller than anticipated and received a $100 million cash injection from its founding brothers.
The New York-headquartered firm’s stock has struggled since its initial public offering, where shares were valued at $28 each. By Thursday’s close, the price had dropped to $5.26.
The financial boost, revealed Thursday evening, came from Winklevoss Capital Fund, which purchased shares at $14 each using bitcoin as payment. Cameron and Tyler Winklevoss own this fund, which operates as their family investment office and primary source for venture capital and cryptocurrency investments.
For the quarter ending March 31, the company reported a net loss of 93 cents per share, which beat analyst projections of $1.03 according to LSEG data. Revenue climbed 42% year-over-year to $50.3 million, boosted by increased income from services and OTC platform operations.
Market experts remain skeptical about the company’s prospects.
“Were it not for the founders’ $100 million strategic investment, we think Gemini would likely be down on the print as key metrics like user and revenue reacceleration fell well short of pre-IPO expectations,” Evercore analyst Adam Frisch said.
CEO Tyler Winklevoss stated the market has “significantly undervalued Gemini.”
The financial results come during a challenging period for the company. Both Gemini and the Winklevoss brothers are defending against a shareholder lawsuit claiming investors received misleading information about the company’s future prospects. The legal action points to strategic changes, workforce reductions, and leadership exits as factors that have hurt stock performance.
In February, the company announced plans to eliminate approximately 25% of its employees, shut down most overseas operations, and saw the departure of its chief operating, financial and legal officers. Danijela Stojanovic has been serving as temporary finance chief since that time.
According to Frisch, Gemini has not yet released revenue projections, which limits investor understanding of the company’s expansion into predictions and derivatives markets.
The Winklevoss brothers became widely known after taking legal action against Mark Zuckerberg, claiming he took their concept for Facebook. They reached a settlement in 2008 that included both cash and stock compensation.
