Key Points
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The preliminary results revealed some mixed trading conditions, and three senior executives are departing.
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Growth in its credit card revenue is a positive underlying sign for the company, and higher cryptocurrency prices will help spark a recovery in the company’s fortunes.
Gemini Space Station (NASDAQ: GEMI) stock declined by 20.6% in the week to Friday morning. The move was driven by a few factors that continue to pose ongoing challenges for the business run by the high-profile Winklevoss twins.
Bitcoin, and preliminary results
First, the price of Bitcoin continued its decline this week and is now down 24.3% in 206 as of the time of writing. That’s bad news for Gemini as it will negatively impact its exchange transaction revenues. Falling cryptocurrency prices discourage trading activity.
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The credibility of that observation was enhanced by management’s release of preliminary estimates for its full-year 2025 results. In an SEC filing released on Tuesday, management said its full-year transaction revenue would be between $93 million and $99 million.The midpoint implies $24.7 million in transaction revenue in the fourth quarter, down from the $26.3 million reported in the third quarter.
However, the company appears to be growing its Gemini credit card revenue, as full-year total company net revenue of $165 million to $175 million implies growth of $29 million on the $141 million reported in 2024. Management put this down to being “driven by growth in credit card revenue.”
That said, staking revenue is likely to be pressured by a lower Bitcoin price, as is custodial fee revenue, as it’s a factor of the value of assets held in custody.
Executive departures
The company also announced that it “will be parting ways” with its Chief Operating Officer, its Chief Financial Officer, and its Chief Legal Officer. Cameron Winklevoss will take on additional responsibilities, and the company has appointed Danijela Stojanovic as interim CFO.
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Where next for Gemini Space Station
It’s a business undergoing significant upheaval, and growth in its credit card usage is a positive sign; the stock has upside exposure to a recovery in cryptocurrency prices. The loss-making stock is unlikely to attract anyone outside cryptocurrency bulls, but it will be more attractive once the dust settles on the operational and administrative upheavals.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.