Key Takeaways
- Citi analyst Peter Christiansen downgraded Gemini Space Station (GEMI) to Sell from Neutral, slashing the price target from $13 to $5.50
- Shares declined 5.1% in premarket hours to $6.75, bringing year-to-date losses to 28%
- The firm forecasts a $263 million adjusted EBITDA loss for 2025, with profitability now delayed until 2029
- App downloads plummeted to 41,000 in February, a sharp decline from the consistent 100,000+ monthly downloads in the previous nine months
- The company has already implemented a 25% workforce reduction and exited operations in the UK, Europe, and Australia
Shares of Gemini Space Station have plummeted from their $28 IPO price last September to roughly $6.75 today. Wednesday brought another blow to already battered investors.
Gemini Space Station, Inc. Class A Common Stock, GEMI
In a research note published Wednesday morning, Citi’s Peter Christiansen downgraded GEMI from Neutral to Sell, simultaneously reducing his price target to $5.50 from the previous $13 estimate. The timing precedes Gemini’s fiscal-year earnings announcement scheduled for Thursday’s post-market session.
Premarket trading saw shares fall 5.1%. The stock has now surrendered 28% of its value year-to-date.
The Winklevoss brothers’ timing for taking Gemini public couldn’t have been worse in hindsight. The company debuted when Bitcoin was hovering near record highs. Since that October peak, Bitcoin has retreated approximately 40%, dragging down trading activity industry-wide.
This downturn is devastating for Gemini’s business model. Declining trading volumes directly translate to shrinking revenues, and the platform was already operating in the red.
Path to Profitability Extended to 2029
Citi had previously projected Gemini would achieve positive EBITDA by 2028. That timeline has now been extended to 2029 or beyond.
For the current year, Christiansen anticipates an adjusted EBITDA loss of $263 million. The company is hemorrhaging cash while attempting to expand its platform amid challenging market conditions.
“We have increasing concerns the company will be challenged to scale profitability within a reasonable time frame for equity investors,” Christiansen wrote.
The analyst also highlighted that progress on the CLARITY Act—legislation that could provide regulatory clarity for crypto exchanges—remains gridlocked as lawmakers continue debating critical provisions.
User Engagement Shows Troubling Decline
User metrics paint an equally concerning picture. Monthly unique visitors to Gemini’s platform have consistently declined since the September IPO.
February app downloads totaled just 41,000. This represents a dramatic drop from the preceding nine-month period, when monthly downloads consistently exceeded 100,000.
For a business dependent on network effects, such a steep decline poses significant challenges without a major catalyst to reverse the trend.
Gemini has responded aggressively on the cost-cutting front. The company announced last month it would eliminate approximately 25% of its workforce.
Additionally, Gemini revealed plans to cease operations in the UK, Europe, and Australia. The company has also experienced departures of its COO, CFO, and Chief Legal Officer.
“We find ourselves stretched thin with a level of organizational and operational complexity that drives our cost structure up and slows us down,” the Winklevoss twins explained in a blog post addressing the international withdrawal.
While these cost reductions are designed to extend the company’s runway, Citi remains skeptical about whether there’s sufficient time for a turnaround.
Investors will get their next critical update when Gemini releases its complete fiscal-year results following Thursday’s market close. The report will provide crucial insights into whether the company’s restructuring efforts are producing tangible results.
