According to Fortune, Gemini’s shares plunged more than 17% to $13.88 after the company reported third quarter losses of $6.67 per share. That’s more than double what analysts were expecting from the Winklevoss twins’ crypto exchange. This marks Gemini’s first earnings report since going public in September, when it hit an all-time high of $45.89. The company is now down roughly 70% from that IPO peak. Goldman Sachs analyst James Yaro noted the “weaker quarterly results” were driven by higher expenses across categories. The losses come as Gemini tries to expand beyond basic crypto trading into a “super app” connecting traditional finance and crypto.
Post-IPO reality check
Here’s the thing about going public – suddenly everyone can see your dirty laundry. Gemini’s first quarterly report as a public company reveals some brutal numbers. They’re burning through cash on marketing and IPO-related costs while trying to build this ambitious “super app” vision. But the core exchange business isn’t exactly printing money either. When you’re generating 40 times less revenue than Coinbase in the same quarter, that’s a pretty stark comparison. And with crypto market cap down 10% this quarter according to Goldman’s analysis, the timing couldn’t be worse.
The super app gamble
So what’s Gemini actually trying to build? Cameron Winklevoss talks about this “super app” that bridges traditional finance and crypto. Basically, they want to be more than just another place to buy Bitcoin and Ethereum. But expanding into new services costs money – lots of it. And right now, those costs are dramatically outpacing their revenue. It’s a classic growth versus profitability dilemma. Do investors have the patience to wait for this grand vision to materialize? The 17% stock drop suggests maybe not.
Crypto winter returns?
Gemini’s struggles aren’t happening in a vacuum. The broader crypto market has been pretty rough lately, with total market cap down significantly. When the tide goes out, you see who’s swimming naked, as they say. And Gemini’s expensive super app ambitions look particularly vulnerable in this environment. Meanwhile, Circle – another newly-public crypto company – reports earnings Wednesday. If they post similar losses, we might be looking at a sector-wide problem rather than just Gemini-specific issues.
Long road ahead
Cameron Winklevoss called this quarter “only the beginning of our next journey” in the earnings call. That’s probably true, but not in the way he meant. The journey back to that $45 IPO price looks like a long, difficult climb. The Winklevoss twins have been in crypto since practically the beginning, and they’ve survived multiple boom-bust cycles. But running a public company is a different ballgame entirely. You can’t just talk about long-term vision when shareholders see their investment down 70% in two months. The pressure is officially on.
