Gemini Space Station (GEMI), the crypto exchange founded by Tyler and Cameron Winklevoss, reported a larger-than-expected third-quarter loss in its first earnings release since going public.
Heavy expenses, particularly on marketing and costs related to the initial public offering, led to a net loss of $159.5 million, or $6.67 per share, in the period. That was double the loss of $3.24 per share expected by analysts. The company’s shares fell 8.67% in premarket trading to $15.38 even as revenue doubled from the prior-year period to $50.6 million.
Increased trading activity and exchange-free products, such as a crypto rewards credit card and staking services, fueled revenue growth, which surpassed Coinbase’s (COIN) 55% during the same period. Kraken, another competitor, also said quarterly revenue doubled from last month’s reporting.
“Overall, we believe our balance sheet remains healthy with ample liquidity and diversified financing to support growth across all of our key products,” Chief Financial Officer Dan Chen said on the company’s earnings conference call.
The exchange, which went public at $28 a share in September, said it is creating a multi-product “super app” that goes beyond cryptocurrency trading. That includes the planned introduction of regulated prediction markets for sporting and political events, pending regulatory approval.
“We’re very excited about these markets. We think it’s very early,” Cameron Winklevoss said on the earnings call. “This idea that you can essentially build a marketplace on anything, any type of event, is fascinating and really a limitless opportunity.”
