May 15 - Gemini Space Station experienced a notable premarket surge of over 20% on Friday following the company's release of quarterly results and a substantial capital infusion from its founders. The injection, worth $100 million, was made by Winklevoss Capital Fund at $14 per share, with payment in bitcoin. Winklevoss Capital Fund is owned by Cameron and Tyler Winklevoss and serves as their family office and principal vehicle for venture capital and cryptocurrency investments.
The firm had been priced at $28 per share in its initial public offering, but the stock had fallen considerably since then, closing at $5.26 on Thursday. The founders' transaction was disclosed late on Thursday and was followed by the premarket share jump.
On the financials, Gemini reported a net loss per share of 93 cents for the three months ended March 31, narrower than the 1.03 dollar loss per share analysts had expected, according to LSEG estimates. Quarterly revenue rose 42% year-over-year to 50.3 million dollars, with growth driven by services and over-the-counter platform revenue.
Despite the improvement versus expectations on the loss per share and a large increase in revenue, analysts tempered enthusiasm. Adam Frisch of Evercore said that absent the founders' 100 million dollar strategic investment, the company would likely have seen a negative reaction to the results because key metrics such as user growth and revenue reacceleration fell short of expectations set before the IPO.
Chief Executive Officer Tyler Winklevoss was quoted as saying the market has "significantly undervalued Gemini." That comment accompanied the disclosure of the founders' investment and the quarterly results.
The release of results and the founders' capital backstop come amid a turbulent set of events at the company. Gemini and its founders face a shareholder lawsuit alleging investors were misled about the company's prospects. Observers point to a strategy shift, workforce reductions and departures among senior executives as factors that have pressured the stock.
In February, the company disclosed plans to reduce its headcount by about 25%, to wind down most of its international operations, and it parted ways with its chief operating officer, chief financial officer and general counsel. Since those departures, Danijela Stojanovic has been serving as interim finance chief.
Frisch also noted that Gemini has not provided revenue guidance, which leaves investors with limited visibility into the company's efforts to expand into predictions and derivatives products. That absence of forward-looking clarity was cited as a lingering concern for market participants.
The account of the Winklevoss twins in the public record also notes that they first drew wide attention after suing Mark Zuckerberg, alleging he had taken their concept for Facebook; that dispute was settled in 2008 for cash and stock.
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