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Gemini Raises IPO Target to $433M at $3.1B Valuation After Strong Investor Demand

Gemini Space Station Inc. increased its initial public offering (IPO) target to $433.3 million after oversubscribed demand prompted a price range increase to $24-$26 per share from the original $17-$19 range.

According to the Bloomberg report, the Winklevoss twins’ crypto exchange achieved a $3.1 billion valuation at the top of the elevated range.

Nasdaq committed $50 million in a private placement at the IPO price, contingent on successful closing.

The investment adds credibility while establishing partnership terms for Gemini’s custody and staking services to reach Nasdaq’s client base.

From Modest Beginnings to Wall Street Darling

The company maintains its 16.7 million share offering despite the significant price increase.

Goldman Sachs and Citigroup lead the offering as bookrunners, with trading expected on the Nasdaq Global Select Market under the ticker GEMI.

Gemini allocates 20% of IPO shares for long-standing users, management, employees, and retail investors through platforms including Robinhood, SoFi, and Webull.

The allocation strategy aims to broaden ownership beyond institutional investors.

Founded in 2014 by Cameron and Tyler Winklevoss, Gemini now manages over $18 billion in platform assets.

The exchange offers crypto trading, USD-backed stablecoin, digital asset custody, staking services, and crypto rewards credit cards.

The IPO follows Circle Internet Group’s successful $1.2 billion public debut in June, which raised $583 million in net proceeds.

In fact, Circle’s strong first quarterly earnings as a public company sent shares up 11% in pre-market trading.

Financial Losses Persist Despite Strong Market Demand

Gemini reported $282.5 million net loss on $68.6 million total revenue in the six months ending June 30.

The losses increased from $41.4 million on $74.3 million in revenue during the same period last year.

Contrary to the revenue report, the deteriorating financial performance did not affect strong investor demand for the IPO.

The exchange now even competes with larger global rivals, like Coinbase, Binance, and traditional financial institutions entering crypto services.

However, Gemini positioned itself as an institutionally friendly platform through strict security protocols and regulatory partnerships.

Revenue streams include trading fees, custody services, stablecoin operations, and staking commissions.

The business model relies heavily on crypto market activity and trading volumes, which fluctuate significantly with market conditions.

Operating expenses continue to exceed revenue as the company invests in technology infrastructure, regulatory compliance, and geographic expansion.

For instance, the recently announced European launch required substantial regulatory approval processes and operational setup costs.

Gemini’s credit card offering crypto rewards and stablecoin services also provides diversification beyond pure trading revenue.

However, these products remain relatively small contributors to overall revenue generation compared to core exchange operations.

Nasdaq Partnership Opens Institutional Gateway

The Nasdaq investment establishes a strategic partnership beyond pure financial commitment.

Gemini will provide custody and staking services on a non-exclusive basis to Nasdaq clients seeking crypto infrastructure.

Nasdaq clients gain access to Gemini’s institutional-grade security protocols, including segregated cold storage and operational controls.

The partnership allows traditional finance institutions to access crypto services through established relationships.

Vice versa, Gemini’s institutional users also receive access to Nasdaq’s Calypso collateral management platform for traditional and digital assets.

The partnership structure follows Nasdaq’s typical investment approach through Nasdaq Ventures for strategic market infrastructure relationships.

For both parties, the arrangement allows flexibility for institutional clients requiring diverse service providers.

Regarding the European expansion, Gemini Perpetuals launched there under MiFID II permissions, offering up to 100x leverage on perpetual futures contracts.

The derivatives platform allows investors to hedge crypto positions and implement complex trading strategies.

It also offers cross-collateralization capabilities, which allow clients to use spot balances and staking rewards within integrated strategies.

The unified platform approach aims to simplify operations for institutional clients managing diverse crypto exposures.

The IPO timing coincides with renewed momentum in U.S. equity capital markets after subdued activity in recent years.

Strong first-day performances for new listings have encouraged private companies to test public market receptivity.

As analysts anticipate, Gemini’s debut could be among the most notable crypto-related offerings since Coinbase’s 2021 public listing, or exhibit a similar Circle’s IPO success.

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