Gemini Allocates 30% of IPO Shares to Retail Investors, Boosts Price Range

Gemini, a prominent cryptocurrency exchange, is set to make its debut on the U.S. stock market this Friday. In a move that underscores the company's confidence in retail investor enthusiasm, Gemini has allocated up to 30% of its initial public offering (IPO) shares to individual investors. This allocation will be facilitated through online brokerage platforms such as Robinhood Markets, Moomoo, and Webull Corp. The decision to allocate such a significant portion of the IPO to retail investors is a bold strategy, especially considering the mixed results of similar moves in the past.

Gemini's approach mirrors that of Robinhood, which in 2021 allocated over a third of its IPO shares to retail investors. While this move generated significant interest, the outcome was mixed, with some investors benefiting from the initial surge in stock price while others faced losses as the market cooled. The challenge for retail investors in Gemini's IPO is the requirement to agree to a lock-up period, which discourages selling the shares within the first month. This could be a double-edged sword, as investors who hold onto their shares may miss out on potential profits if market enthusiasm wanes before they can sell.

Gemini's connection to the cryptocurrency community and its user base of digital asset enthusiasts make it an attractive option for retail investors seeking the next big opportunity. The IPO market has seen successful debuts from companies like Figma Inc. and Circle Internet Group Inc. this year, but Gemini's substantial losses and relatively small market share in cryptocurrency trading could give potential investors pause. The company's representative declined to comment on the matter.

Gemini initially planned to reserve up to 10% of its IPO shares for retail investors but increased this allocation to 30% in its latest filing. The company also secured a $50 million investment from Nasdaq through a private placement. This move is seen as a strategic effort to capitalize on the growing interest in cryptocurrency and to attract a broader base of retail investors.

Gemini's strategy of courting retail investors is more aggressive than that of its competitor, Bullish. Bullish allocated 20% of its IPO shares to individual investors, including self-directed investors and wealthy clients of large banks. This strategy has so far proven effective, with Bullish's stock price surging 84% on its opening day, although it later retreated to close at $52.62. Robinhood's IPO experience was similarly volatile, with its stock price initially soaring above $70 before plummeting to below $7 by mid-2022. However, a recovery in 2025 saw Robinhood's stock trading above $100, providing long-term investors with substantial returns.

Companies like Gemini have strong incentives to attract retail investors, particularly those who are passionate about cryptocurrency and already familiar with the company as customers. The presence of a stockholder base composed of cryptocurrency enthusiasts can be a significant advantage, as these investors are often more willing to pay higher prices and hold onto their shares despite market fluctuations. However, there is a risk of adverse selection, where the stock is perceived as less attractive by institutional investors, potentially leading to a lower valuation.

On the same day that Gemini announced its increased allocation to retail investors, it also raised its IPO price range from $17 to $19 per share to $24 to $26 per share. This move suggests that the company is confident in the demand for its shares and is leveraging retail investor enthusiasm to drive up the price. Despite the potential risks, obtaining shares at the IPO price rather than having to buy them at a potentially higher market price after the listing provides some protection for small investors.