Investors Quickly Forget About Pershing Gold Corporation (OTCMKTS:PGLC)

For a brief moment last Tuesday Pershing Gold Corporation (OTCMKTS:PGLC) surged up the chart after traders rushed in to the stock. Such an enormous interest propelled the ticker above $0.40 and traded volume reached the record for 2013 number of 4.9 million shares.

Just three days later and all the enthusiasm seems to be gone with volumes returning to the normal amount of below a million. Still PGLC is largely keeping its price gains closing at $0.388 on Friday. The company lured investors in with the August 27 announcement that a $11 million private placement was completed. Most of the funds came from the founder of the company and its lead investor Barry Honig.

To have such a reserve is always a good thing for a gold and precious mineral exploration company that is still in pre-production with no revenues. But this may not be case for all of its shareholders who should expect further dilution of the company’s common stock by another 33 million if all of the Series E Convertible Preferred are used. For now the 16 million warrants aren’t such an issue with a conversion price of $0.4, slightly above the current price per share. PGLC has also managed to accrue the massive $65 million deficit in just two years of operations.

The last email alert touting them came on July 12 from the notorious newsletter TooNiceStocks. It was rather surprising that they did it for apparently no compensation at all when they consistently are among the top paid pumpers. Despite the disastrous performance of the targeted tickers Too Nice Stocks got $250 thousand for Exlites Holdings International, Inc. (OTCMKTS:EXHI) and $350 thousand for Prince Mexico SA Inc (OTCMKTS:LUVE).

Doing your due diligence is a good first step if you are contemplating investing in PGLC. The company is prone to volatility and sharp movements in either direction. The results of the recently initiated Phase I drilling may determine the short term trend of the stock.