May 15 (Reuters) - Gemini Space Station shares surged more than 20% in premarket trading on Friday after the cryptocurrency exchange reported a smaller-than-expected quarterly loss and its founders injected $100 million into the business.
Shares of the New York-based company were priced at $28 in their IPO, but have since lost ground, closing at $5.26 on Thursday.
The investment, announced late Thursday, was made by Winklevoss Capital Fund at $14 per share, with payment in bitcoin. The fund, owned by Cameron and Tyler Winklevoss, is their family office and main vehicle for venture capital and crypto investments.
Net loss per share was 93 cents in the three months ended March 31, better than the $1.03 analysts had expected, according to LSEG estimates. Quarterly revenue surged 42% to $50.3 million from a year earlier, driven by growth in services and OTC platform revenue.
Analysts, however, remain cautious.
"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 said the market has "significantly undervalued Gemini."
MORE TROUBLE, LESS STAFF
The results arrive against a turbulent backdrop. Gemini and founders Cameron and Tyler Winklevoss face a shareholder lawsuit alleging investors were misled about the firm's business prospects, with a strategy shift, job cuts and executive departures blamed for driving down the stock.
In February, Gemini said it would cut about 25% of its workforce, wind down most of its international operations, and parted ways with its chief operating, financial and legal officers. Danijela Stojanovic has served as interim finance chief since then.
Frisch said Gemini has yet to provide revenue guidance, leaving investors with limited visibility into its push into predictions and derivatives.
The Winklevoss twins first gained public prominence after suing Mark Zuckerberg, alleging he stole their idea for Facebook. They settled in 2008 for cash and stock.
(Reporting by Pritam Biswas and Arasu Kannagi Basil in Bengaluru; Editing by Tasim Zahid)
