Stock market

Helium A Share Price: Is There Only One Way?

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It may be the second most abundant element in the universe, but helium is in short supply here on Earth. And that could mean good news for you Helium One Global (LSE: HE1) share price.

Shares were flying, relatively speaking, in 2021. But they fell back. And a fresh low since November 2023 has pushed the price to low-money levels.

But the price has increased in early 2024. So can we look for a good buying opportunity now?

excitement

First of all, what is all the excitement? Well, the past two months have brought a flurry of good news.

In February, the company reported positive results from its Itumbula West-1 well in Tanzania. As an aside, who knew they got helium by digging it out of the ground? This seems a little strange to me.

Anyway, well done”Measured concentrations of up to 4.7% helium,which is approximately 9,000 times higher than background levels.

A few days later, the firm announced the successful raising of £4.7m through a stock placement.

Interim

It was topped by interim results in March.

Chairman James Smith said:Itumbula’s results can only be seen as transformative. Company; The concentration of helium flowing to the surface at these levels would position Itumbula at the top of the major helium-producing fields.

So, if this is the change, what does that mean for what investors should do?

Well, in a way, I think it could effectively set us back a year or two, before a series of disappointments hammered the share price. And something to start over.

Value

The difficulty I have comes down to valuation. Specifically, that I don’t know where it should be.

The predictions had no profit for the foreseeable future. They will definitely have to change now, though, after the Itumbula development.

But we still don’t know when the profits will come. Or, perhaps more importantly, how much more money Helium One will need to raise before we get there.

The company raised £12.9m in September and December 2023. And we have the latest £4.7m to add to the coffers too.

Enough cash?

The board says it “Sufficient working capital to advance your planning for the next phase of the work program in Tanzania

But that still seems to fall short of putting real profits in shareholders’ pockets.

There is also the risk of penny stocks. And a very low share price with erratic trading volume can lead to considerable volatility in share prices.

Buy or not?

I think Helium One’s share price could be quite high by the end of 2024. But I still see a few dangerous years ahead. And I couldn’t predict where the shares would be by 2026.

So I’d stay away from it, while wishing the best for growth stock investors who can take the risk and buy now.


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