What: After a 125% advance in August, Peabody Energy Corporation's (OTC:BTU) stock fell an equally dramatic 50% (OK, 49.3%) in September. To suggest the international coal giant's stock has been volatile of late would be a massive understatement.

So What? The last three months have been a roller coaster for Peabody shareholders. Down 32% in July, up 125% in August, and down 50% in September. (For the record, it's down about 22% over that three month span.) But volatility isn't surprising for a company that sits atop an out of favor commodity industry that's not only struggling on the pricing front but is also facing an existential crisis—basically, does the world want dirty coal in the energy mix anymore?

The answer to that question may not matter as much as whether the world needs coal in the energy mix, but the shift toward cleaner burning fuels is clearly starting to take place in key Peabody markets like the United States. And the Chinese economy starting to cool off doesn't help perceptions, since this global miner's Australian operations count that country as a key customer (perhaps the key customer is more appropriate). At the end of the day, coal pricing is still weak and Peabody's financial results are, too.

So while it's impressive that Peabody remains solvent while other coal miners are falling into bankruptcy, the long-term picture is still pretty cloudy. In other words, August's heady advance sure looks like it was a bit of irrational exuberance that was quickly corrected in September.

No what? The jury is still out on Peabody. Second quarter earnings, reported on the last day of July, showed things were bad, but not as awful as the results that some competitors are showing. But the coal market hasn't gotten better, so there's no reason to expect a performance upturn. While the miner looks like it will be a survivor and is doing the right things to get through this market downturn, the downturn isn't over yet. And until coal markets turn higher, Peabody's results will continue to suffer. Note that the 1 for 15 reverse stock split that took effect on October first may increase the price of the shares, but it does nothing to change Peabody's less then encouraging story.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.