Gemini Went Public at $28 a Share. Six Months Later, It Is Fighting a Fraud Lawsuit at $6.

Photo: AI Generated / TheMarketContext.com

When Gemini Space Station, Inc. began trading on the Nasdaq Global Select Market on September 12, 2025, the mood was electric. The offering was priced at $28 per share, raised $425 million, and valued the Winklevoss brothers’ crypto exchange at roughly $3.3 billion. The IPO was reportedly more than 20 times oversubscribed. Nasdaq itself invested $50 million in a private placement at the IPO price. On its first day, the stock opened at $37.01 and closed at $32.

Six months later, the picture looks nothing like what investors signed up for.

As of March 21, 2026, GEMI trades around $6 per share — a decline of more than 80% from its first-day close and roughly 78.5% below the IPO price. The company’s market capitalization has shrunk from over $3 billion at launch to approximately $700 million. And now, a proposed class-action fraud lawsuit is alleging that Gemini’s leaders knew the business was headed for a dramatic overhaul before they ever sold a single share to the public.

The IPO Story vs. the Reality

A class-action complaint filed on March 19, 2026 in the U.S. District Court for the Southern District of New York (case number 26-cv-02261) was brought by plaintiff Marc Methvin on behalf of investors who purchased Gemini’s Class A common stock during the IPO or through mid-February 2026. The suit names Gemini, co-founders Cameron and Tyler Winklevoss, and several company executives as defendants.

The core allegation: Gemini’s offering documents painted the exchange as a growing crypto platform focused on expanding internationally and building its user base. But the complaint argues those representations were materially false or incomplete, because the company was allegedly already preparing for a strategic overhaul that would fundamentally alter its business model.

The lawsuit points to two key events. On February 5, 2026, Gemini filed a disclosure announcing what the Winklevoss brothers called “Gemini 2.0.” That announcement included three dramatic changes: prediction markets would become the centerpiece of Gemini’s future, approximately 25% of the workforce would be cut, and the company would exit the United Kingdom, European Union, and Australian markets entirely. On that news, the stock fell 8.72% in a single session.

Then on February 17, three top executives departed simultaneously: Chief Operating Officer Marshall Beard, Chief Financial Officer Dan Chen, and Chief Legal Officer Tyler Meade. The same filing included preliminary financials showing wider-than-expected losses. The stock continued falling.

The lawsuit seeks damages under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The deadline for lead plaintiff applications is May 18, 2026.

The Numbers Behind the Losses

Gemini reported its fourth-quarter and full-year 2025 results on March 19. The revenue picture showed progress in some areas, but the cost side overwhelmed it.

Fourth-quarter revenue came in at $60.3 million, up 39% year over year and the company’s highest quarterly revenue in three years. For the full year, total revenue reached $179.6 million, a 26% increase from 2024. Services revenue — which includes interest income, staking fees, and credit card revenue — hit $64.6 million for the year, up 115%.

The credit card business was a standout. Card net revenue reached $33.1 million for the year, up 185% from 2024. Card signups grew roughly 15 times year over year, and card receivables expanded from $65.8 million to $219.8 million.

But the losses were staggering. Gemini’s net loss widened to $140.8 million in the fourth quarter alone, compared to $27 million a year earlier. For the full year, the net loss came in at approximately $583 million — nearly four times the $158.5 million lost in 2024. Sales and marketing expenses surged more than fourfold to $97.1 million, driven by crypto rewards promotions and card acquisition spending. Total compensation hit $225.9 million, including $85 million in stock-based compensation. The Winklevoss brothers called 2025 the most expensive year in the company’s history.

Shares initially jumped 14% after hours on the earnings release, but settled to a gain of about 5.8%, closing after hours around $6.36.

The Prediction Market Pivot

The strategic shift investors are now challenging began taking shape in December 2025 when Gemini’s affiliate, Gemini Titan LLC, received a Designated Contract Market (DCM) license from the Commodity Futures Trading Commission (CFTC). A DCM license is a federal authorization that allows an exchange to offer regulated derivatives and event-based contracts to customers in all 50 U.S. states.

Gemini launched Gemini Predictions in mid-December 2025, allowing users to trade on outcomes of real-world events — Federal Reserve rate decisions, cryptocurrency price targets, political outcomes, and sports. The platform has attracted more than 15,000 users since launch, and early data from the company suggests 55% of prediction market traders also hold a Gemini Credit Card, hinting at cross-product engagement.

Cameron Winklevoss told investors the company believes prediction markets could eventually rival or surpass traditional capital markets. Management described a vision of a “super app” where users can access crypto trading, credit card rewards, prediction markets, perpetual futures (once approved in the U.S.), and eventually U.S. equities — all on one platform.

Whether that vision materializes is an open question. But the immediate cost has been clear: exiting three major international markets, cutting nearly a third of the workforce, and losing three C-suite executives in a single day.

AI and the Workforce

One detail from the shareholder letter that stood out: the Winklevoss brothers said artificial intelligence is now used in more than 40% of Gemini’s production code changes, up from just 8% last summer. They expect that figure to approach 100% over time, and attributed part of the workforce reduction to efficiency gains from AI.

As of March 1, 2026, Gemini had approximately 445 employees, down from 650 at the end of the fourth quarter and from more than 1,000 during the 2021 crypto bull market. The company is operating with what management described as a smaller, flatter organizational structure.

For 2026, Gemini provided partial guidance. Compensation costs (excluding stock-based comp) are expected to decline 15% to 20% from 2025 levels. Stock-based compensation is projected at $100 million to $115 million. Restructuring charges tied to the “Gemini 2.0” plan are expected to total $11 million pre-tax, landing almost entirely in the first quarter.

A History of Legal Battles

This is not Gemini’s first time in a courtroom. The SEC sued the company in January 2023 over its Gemini Earn lending program, alleging it was an unregistered securities offering. When the lending partner, Genesis Global Capital, paused withdrawals in late 2022, Gemini Earn investors were locked out of their funds for 18 months. That case was eventually dismissed in January 2026 after investors received 100% of their crypto assets back through the Genesis bankruptcy process. Gemini had previously settled with the New York State Department of Financial Services for $37 million and contributed $40 million to the bankruptcy.

Separately, Gemini settled with the CFTC in January 2025, paying a $5 million penalty over allegations of misleading statements regarding a Bitcoin futures contract in 2017.

But those cases involved regulatory enforcement related to specific products. The new lawsuit strikes at something more fundamental: whether Gemini told the truth to its own shareholders at the time of its public offering.

What to Watch

The lawsuit timeline. The lead plaintiff deadline is May 18, 2026. Multiple law firms — including Pomerantz LLP, Robbins LLP, Holzer & Holzer LLC, and Barrack, Rodos & Bacine — have issued notices encouraging affected investors to come forward. Gemini has not yet publicly responded to the complaint.

Prediction market traction. With just 15,000 users so far, Gemini Predictions is in its earliest stages. The company is competing against Kalshi (which also holds a DCM license) and Polymarket (which operates offshore). Whether prediction markets generate meaningful revenue in 2026 will shape the next chapter.

Cash runway. Gemini ended 2025 with approximately $252 million in cash. With annual losses exceeding half a billion dollars and projected stock-based compensation of up to $115 million this year, the math on profitability is tight. Management said they expect improved Adjusted EBITDA in 2026 from cost cuts and revenue diversification, but the market is waiting for proof.

Analyst sentiment. Citi downgraded GEMI to Sell on March 18, citing profitability concerns. Rosenblatt lowered its price target from $26 to $11.50 in February. Evercore ISI initiated at Hold this week.