The stock of Gemini (NASDAQ: $GEMI) is up 25% on news that co-founders Tyler and Cameron Winklevoss have invested $100 million U.S. in the cryptocurrency exchange.
The twin brothers injected the capital into Gemini through Winklevoss Capital Fund, their venture capital vehicle.
The venture fund bought shares of the company’s Class A common stock at $14 U.S. each, paid in Bitcoin (CRYPTO: $BTC).
The announcement of the $100 million U.S. capital injection was made along with the company’s first-quarter financial results. Shares were up 30% at one point on the news.
“We believe the market has significantly undervalued Gemini, and that this investment will allow us to set up the company for its next phase of growth,” said Tyler Winklevoss, CEO of Gemini.
Since going public last September, Gemini struggled with a string of financial losses, executive changes, and a shift toward artificial intelligence (A.I.) and prediction markets.
The pivot to prediction markets has resulted in the company being hit with a class-action lawsuit alleging that Gemini misled investors about its strategy.
Prior to today (May 15), GEMI stock had fallen 84% since its IPO last year, trading at $5.26 U.S. per share.
For this year’s first quarter, Gemini reported a narrower-than-expected loss of $0.93 U.S. per share. Wall Street expected a $1.03 U.S. per share loss.
Revenue of $50.3 million U.S. beat forecasts that called for sales of $47.9 million U.S.
While crypto exchange revenue dropped 27% on a year-over-year basis to $17.2 million U.S., Gemini reported credit card revenue of $14.7 million U.S., a nearly 300% year-over-year increase.
Services revenue during Q1 and interest income rose 122% from a year ago to $24.5 million U.S.
Cameron Winklevoss, president of Gemini, attributed much of the company’s difficulties to swings in crypto prices over the past few months.
There are rumours circulating online that Gemini could be a takeover target.
