Tuesday was an eventful day for Gemini Space Station (GEMI 8.56%). Unfortunately for investors, this led to a sell-off in the cryptocurrency exchange operator's stock. It declined by almost 13%, not least because an analyst downgraded his recommendation.
"Prelims" and C-suite departures
In a regulatory filing, Gemini provided several preliminary estimates for its performance in 2025. The company said net revenue should be between $165 million and $175 million for the year. That compares favorably to the $141 million it earned in 2024. However, it's entirely in line with the nearly $169 million consensus analyst estimate.
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That comes on the back of an anticipated 17% rise in Gemini's count of monthly transacting users, to around 600,000. Operating expenses are also anticipated to have risen dramatically, to $520 million to $530 million, up from 2024's $308 million.
Finally, earnings before interest, taxes, depreciation, and amortization (EBITDA) not in accordance with generally accepted accounting principles (GAAP) is forecast at a loss of $257 million to $267 million for the year. A net income projection was not provided.
In that disclosure, Gemini also divulged that several C-suite members are departing the company. Specifically, these are COO Marshall Beard, CFO Dan Chen, and chief legal officer Tyler Meade. All three transitions were effective on Tuesday. It appointed an interim successor to Chen, namely former chief accounting officer Danijela Stojanovic. The company said it does not intend to replace Beard at the moment.
NASDAQ: GEMI
Key Data Points
A new and more bearish view
As if that weren't enough to put the hurt on Gemini's stock price, that afternoon Truist Securities analyst Matthew Coad downgraded the shares. To him, they are now only worthy of a hold; his previous recommendation was buy. Coad also significantly lowered his price target -- it now stands at $7 per share, down from $13.
Any time a company endures more than one unexpected, high-level resignation, it's cause for concern. I would categorize the triple one Gemini announced as troubling, and reason alone to stay away from the stock now.
