Gold Coast Mining Corporation (OTCMKTS:GDSM) Cut In Half After Record Dumping Of Shares
As so many other pennystocks lately Gold Coast Mining Corporation (OTCMKTS:GDSM) started talking about the creation of a new subsidiary that will be involved in the marijuana industry. Even now the magical word “marijuana” is capable of having an immediate effect and tickers that were sitting at the absolute rock-bottom triple-zero price levels start surging upwards.
After the initial corporate update that was posted on February 11 GDSM has been capitalizing on the hype around the green plant and despite going through a couple of serious corrections managed to hold most of its gains. On Monday they more than doubled when the stock added 150% to its value and closed the day at $0.0033.
The positive momentum carried over to the next morning when GDSM went even higher reaching a new 52-week high of $0.0035. In the afternoon though sentiment among investors changed drastically and in the last two and a half hours of the session the stock plummeted downwards by 51% to $0.0016. The record for the company number of 1.5 billion shares was dumped on the market with most of the volume generated during the fall.
The disastrous drop occurred shortly after another corporate update was published by GDSM. It contained little concrete information but apparently now the management team is considering acquiring or constructing “grow facilities, as well as, dispensary locations”. This new business plan will be developed in addition to new marijuana subsidiary which we covered in our previous article.
As always the future marijuana operations sound promising but GDSM should be approached with extreme caution. They are still negotiating the term sheet with Gelpid Associates, LLC, who are supposed to receive close to $5 million after a judicial default judgment in their favor. GDSM are also continuing to find excuses for the still ongoing audit of their financials.
On October 31, 2013 they were expecting the audit to be completed by the end of next month. Well, after a couple of months of silence on the subject on February 18 GDSM were required to submit four remaining items to the auditing firm that should have been provided no later than the next week. In yesterday’s corporate update we learn that the items were not supplied thus pushing the date further back by one more week.
The financial state of the company is of utmost importance to shareholders when the last filed report covered the quarter ending September 30, 2013 and it revealed a rather grim picture:
• cash: $0
• current assets: $0
• total current liabilities: $1.4 million
• revenues: $0
• net loss: $37 thousand
Not to mention that since the end of September the outstanding number of shares has nearly doubled from 1,8 billion to 3,2 billion as of February 18. At the same time the total authorized shares were increased to 6.5 billion so further dilution is certainly not out of the question.
GDSM is just another pennystock brought back to life by entering the marijuana industry. At the current cheap price levels its behavior is extremely volatile so it can offer both opportunities for quick gains or severe losses. Do your own due diligence and plan accordingly before attempting any trades.
In a break from the pattern of dirt-cheap pennystocks entering the marijuana business yesterday we saw the stock of Medican Enterprises Inc (OTCBB:MDCN) add close to 45% to its value ending the day at $3.49. Despite the impressive share price just a few months ago MDCN was nothing but a shell in a disturbing financial state.
