Shareholders filed a class action lawsuit against Gemini Space Station, Inc. (NASDAQ:GEMI) and the Winklevoss brothers on Wednesday, alleging that the company misled investors in relation to its Initial Public Offering.

‘False, Misleading Statements’

The lawsuit claimed that Gemini failed to disclose several key issues in the documents supporting its IPO, according to San Diego-based plaintiffs’ law firm Robbins LLP. These include overstating the viability of its core business as a cryptocurrency platform and its international expansion.

The lawsuit also alleged that the company’s post-IPO financial and business prospects were overstated. The plaintiffs stated that the offering documents and public statements made by co-founders, Tyler and Cameron Winklevoss, were “materially false and misleading.”

The shareholders pointed to a blog post by the Winklevoss twins dated Feb. 5, announcing a pivot to “Gemini 2.0,” including operational shifts and a 25% workforce reduction.

Gemini didn’t immediately return Benzinga’s request for comment.

Gemini’s Loss Widens In Q4

Cryptocurrency exchange Gemini went public last September, only to watch its stock nosedive 81% in the months since.

The company released its fourth-quarter financial results on Thursday, posting a per-share loss of $1.22 that fell short of analyst expectations. It reported $60.30 million in revenue, surpassing the $52 million estimate.

Analysts at Citi downgraded the stock from “Neutral” to “Sell” earlier this week and slashed its price target to $5.50 from $13 

Price Action: Gemini shares jumped 5.81% in after-hours trading after closing 0.84% higher at $6.01 during Thursday’s regular trading session, according to data from Benzinga Pro.

Benzinga's Edge Stock Rankings show the stock trailing in short-, medium- and long-term price performance.

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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