Crypto Exchange Gemini’s IPO 20x Oversubscribed, but Proceeds Capped at $425M

The initial public offering (IPO) of Gemini, the crypto exchange founded by the Winklevoss twins, has been oversubscribed 20 times, Reuters reported. Further, the exchange and its bankers decided to cap the IPO proceeds at $425 million, which is unusual.

IPO Offer Revised

Gemini initially planned to raise $317 million at a valuation of about $2.22 billion. The company first planned to offer 16.67 million shares priced between $17 and $19 each, but then received an offer price between $24 and $26 each.

Following high demand, the company again increased its IPO offer price yesterday (Thursday) to $28 per share, but lowered the number of offered shares to 15.18 million. This also explains reported the IPO cap the company has put in place.

At the top end of the offering, the company would have a market cap of over $3 billion. Its shares will likely start trading on Nasdaq from Friday’s session.

According to a Securities and Exchange Commission (SEC) filing, Gemini would have raised as much as $433 million in the first share sale without the cap. However, that figure excluded the $50 million the crypto exchange received from Nasdaq in a private placement.

Riding the IPO Wave

Gemini is going public when sentiment towards crypto-related IPOs is at its peak. Stablecoin issuer Circle and brokerage firm eToro, which generates substantial income from crypto trading, also had bumper IPOs earlier this year.

Read more: Gemini Secures MiCA License Alongside MiFID II

Although Circle shares are trading well above the debut price, they have almost halved from the peak reached within weeks of the listing. eToro, on the other hand, has lost a third of its debut value.

Bullish is another crypto exchange that went public in August. It also had a bumper IPO, but its shares are now trading 20 per cent lower than the debut value.

Founded in 2014 by Cameron and Tyler Winklevoss, Gemini has positioned itself as a regulated exchange for U.S. investors. However, the company has faced challenges, including a dispute with bankrupt lender Genesis that drew regulatory scrutiny, but continues to pursue growth in a competitive market.

Earlier this year, the U.S. Securities and Exchange Commission closed its investigation into the company. The exchange also settled a $5 million lawsuit with the Commodity Futures Trading Commission, clearing significant obstacles to its market debut.