Pershing Gold Corp (OTCMKTS:PGLC) Wobblier than Ever
It’s fair to say that Pershing Gold Corp (OTCMKTS:PGLC)’s stock performance is far from stellar. The ticker hit its 52-week high on March 12 when it briefly touched the $0.43 per share mark. Right now it’s sitting at just under $0.29. The volumes are not exactly consistent, and although the stock rarely registers double-digit drops, the slide seems to be relentless.
Perhaps more worryingly, PGLC is losing ground despite the fact that over the last few months insiders have been accumulating shares and they’ve been buying them on the open market. The company has also issued more than a few optimistic press releases, but it would appear that even this isn’t enough to stop the slide. So, why is PGLC‘s chart so disappointing?
The truth is, many people put quite a lot of trust in the company when they saw the copious insider buying and the relatively sound financial position. They thought that with Barry Honig on board and with no shortage of cash, PGLC will prove to be profitable in no time. Unfortunately, the company is still not able to present its shareholders with some revenues.
Of course, if the press releases are anything to go by, this should happen really soon and some loyal shareholders are betting on this. Others, however, have run out of patience. One thing is for sure, until PGLC show definitive proof that they can make money out of their properties, the stock will most likely remain shaky.
And once they do start the revenue generating process, they might want to think about doing something about the dilution. If you take a closer look at the latest 10-Q, you’ll see that on June 30, the number of issued and outstanding shares was sitting at around 275 million. You’ll also see, however, that by August 14, it had grown to more than 316 million.
According to a Schedule 13 form filed on October 24, back then, there were around 317 million shares issued and outstanding and another Schedule 13 from yesterday tells us that the O/S count has now exceeded 350 million.
The future 10-Q’s should present some information on who and why got the newly issued stock, but while they’re waiting for the report (the Q3 results should be out within the next eight days), the shareholders have to think about a few other things.
At the end of last month, PGLC posted a proxy statement which informs us about the questions that are going to be discussed during the annual stockholders meeting. Currently, the company is authorized to issued up to 500 million common shares, but apparently, the management team reckon that this is not going to be enough because they are proposing an increase in the A/S count to 800 million. They are also not sure whether or not they’ll need a reverse split in the future and they are asking the shareholders to give them another twelve months to think about it.
We’re pretty sure that many people who are interested in the company are eagerly awaiting the annual meeting as it should answer a lot of questions. Even after it, however, there will probably be some uncertainties which means that thinking through all the risks before putting any money on the line is absolutely essential.
About forty minutes after today’s opening bell, PGLC is sitting at $0.289 (0.14% in the red).
