Gold Coast Mining, Corp. (OTCMKTS:GDSM) Doubled Again on Continuing Enthusiasm
Gold Coast Mining, Corp. (OTCMKTS:GDSM) gave all the signs that it would be gone for good, but then had another day of wild exuberance, more than doubling in price. GDSM added more than 111% to a price of $0.0019, on buying volumes above $1.27 million. The ticker remains low-priced enough to stage more runs, but keep in mind that only recently it was at rock-bottom triple zero prices, and there is no guarantee it would have enough strength to gain investors’ confidence.
GDSM is still not in active promotion, and only a corporate update from February 18th served to rekindle investors’ interest. Unfortunately, the update is not truly news, as the company is still in the preliminary process of negotiations and legal consultations about its drive to expand from gold into natural gas wells. Also, GDSM will have to present financial results that were so far limited. It is possible that in the days to come, GDSM will struggle to finalize the deals, but even if there are potential gas earnings in the future, the stock price remains vulnerable.
We still don’t know how GDSM will be able to afford the oil well purchase with its dismal financial situation:
- cash: $0
- current assets: $0
- total current liabilities: $1.4 million
- revenues: $0
- net loss: $37 thousand
It does not help that GDSM also has a share structure loaded by 2.36 billion shares outstanding, with a further 3.5 billion authorized- the stock price cannot take dilution without catastrophic results. In short, GDSM has almost exhausted its possibilities for debt or stock financing, unless it endangers its business further.
Some investors’ opinions point out that GDSM may yet conquer higher prices, as lesser quality tickers have done, on the right mix of momentum and publicity. But in the case of GDSM, the price quickly corrects as soon as news are over.
GDSM is the rare mining company among a boom of cannabis stocks- but mining companies with big promises have performed wondrous feats of price movement in the past. First Titan Ore Corp. (OTCBB:FTTN) grew above the dollar levels on a mix of promotion and PR, though in the past three months there’s been a dead cat bounce with a peaking-out at 80 cents, and a slow deflation toward $0.47.
Formcap Corp. (OTCMKTS:FRMC) had an even more breath-taking trajectory, as it peaked at $2, only to crash in three short days to a few cents. Since then, FRMC has recovered a bit on bargain-seeking, but after drifting sideways for a couple of weeks the ticker is under downward pressure again.
Still, short-term explosions like that are attractive to investors. It is best to estimate the right time frame, so as to avoid being caught in the inevitable corrections.