What: Peabody Energy Corporation (NYSE: BTU) investors will need some nausea medication today. The stock has been on a wild ride for the past week, but it really spun out of control today as it crashed more than 28% in early morning trading. Setting off today's plunge was an announcement by the company that its second-quarter loss would be much deeper than expected.

So what: Peabody Energy's most recent troubles started last Friday after its credit rating was downgraded. However, those worries seemed to abate earlier this week, especially after the Supreme Court threw out the EPA's rule that required coal-fired power plants to cut emissions. Unfortunately, that good news bounce didn't last long as the company's announcement that its losses are deepening is reminding investors of the reality that the coal market's troubles only continue to grow worse.

Peabody Energy's second-quarter is being affected by a variety of issues. Weather-related issued led to shipping difficulties out of the Powder River Basin leading to lower production volumes while lower seaborne coal pricing is taking another bite out of its revenue. This is forcing the company to take a variety of charges, which will impact earnings. As a result the company now sees its adjusted per-share loss coming in much worse than its previous guidance of a $0.49-$0.59 per share loss.

Now what: The outlook really doesn't look good for Peabody Energy. Coal prices just continue to weaken, which leading to deeper losses for the company. This is weakening its credit metrics to the point that the company is nearing unsustainable levels. If conditions don't improve soon, Peabody Energy could be joining several other coal producing peers on the pathway toward bankruptcy.