Gemini Faces Lawsuit Over Alleged Misleading IPO Claims
- The shares of Gemini hovered at $28 on the Nasdaq when Gemini held its IPO in September.
- The stock went on to touch $40, but since then it has slipped by over 80% to trade at around $6 on March 19.
Gemini has been accused of allegedly misleading investors during and after the September initial public offering of the crypto exchange. A class action lawsuit against the firm has been filed by shareholders on March 19 in a Manhattan federal court.
The filing includes claims against Gemini, its co-founders Tyler and Cameron Winklevoss and company officials that they made misleading statements in the firm’s IPO documents.
Plaintiff Marc Methvin accused the documents of showing Gemini as a growing crypto exchange aimed at widening its use base and international footprint. But it made a sudden corporate pivot to a prediction-market-centric business model.
The shares of Gemini hovered at $28 on the Nasdaq when Gemini held its IPO in September. The stock went on to touch $40, but since then it has slipped by over 80% to trade at around $6 on March 19.
The plaintiffs are looking for a jury trial and damages as compensation for investors who purchased shares at what the complaint accused were artificially inflated prices soon after the IPO.
What Does The Firm Publicise?
The complaint mentions that in November, Gemini officials publicly announced its international expansion progress, mentioning that the company was committed to widening into prominent global markets.
The lawsuit mentioned Gemini IPO documents mentioned the exchange as its core product. Although, in the beginning of February, the Winklevoss brothers mentioned a pivot to prediction markets known as “Gemini 2.0″.
The firm also publicised that it would reduce 25% of its workforce and exit the EU, UK and Australian markets. In the same month, the CFO, COO and CLO of the company all left, and the firm reported increased operating expenses of about 40% as per the lawsuit.
The firm accused that these changes led the class group to witness significant losses and damages as Gemini’s stock price slipped to an all-time low of $5.82 by February 20.
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