Helium One shares drop sharply in short period after 2020 IPO。Investors tend to like preconceptions and flock to this stock。However, the hype in the stock market can push the stock price up to an extraordinary level in an instant, and when reality comes, the stock price can plummet again

Introduction to Helium One

Helium One is a relatively young company founded in 2015 and only recently listed on the London Stock Exchange Alternative Investment Market in December 2020.。Focusing on the helium commodity market, the company plans to become a major producer of this non-renewable commodity on the world market for use in modern technologies ranging from the medical field to various high-tech solutions.

It is said that HE1 has three helium fields, helium is an essential component of various manufacturing processes, most of which are complex technologies of the new era

Rupert Hargreaves, an investment analyst at The Motley Fool in the UK, said: "The company has one of the richest helium resources in the world."

While helium is the second most abundant element in the universe after hydrogen, the globally available supply of helium is dwindling rapidly.。Tech giants like Amazon, Alphabet and Facebook, as well as giants in the medical field, rely heavily on this inert gas。Forbes once quoted the phrase - "Helium soared as demand boomed and supply shrank."

Helium One was formed to fill this critical shortage in the market, led by new CEO Lorna Blaisse following the departure of former CEO David Minchin。Blaisse is a former chief geologist at Helium One with over 17 years of experience in the exploration and evaluation of oil and gas projects in Africa.

With minimal financing, Helium One has obtained an exclusive license to develop nearly 5,000 square kilometers of so-called helium-rich deposits at three different locations in Tanzania.。Helium One focused on its main mine, Rukwa, while a second mine, Eyasi, was tested and a third, Balangida, received little attention.。There is sufficient infrastructure near each mine site, each within 130-800 km of a major city or port

Analysts are cautious about the stock's course, but for a small drilling company like Helium One, any positive news in the media could push the stock to the top in a short period of time, but more negative news will only make the resistance firmer.

Helium One Stock Price (End of 2023）

Motley Fool analyst Hargreaves, who follows Helium One, summed up investor sentiment in the near term: "Given the speculative nature of Helium One's share price, I will not be buying this stock today.。I prefer to wait and see the results of the company's drilling over the next few months or even years, so that I can better understand how the company's business will develop over time. "

Due to the speculative nature of Helium One's development at this stage, the current share price forecast is purely speculative。Helium One is an early stage company that is still growing its business。While helium prices are expected to rise significantly in the coming years, the company won't be producing products for sale anytime soon.。The company has no significant drilling history to follow, only some test drilling to determine potential, and whether these sites are commercially viable remains a question.

The main concern is the company's cash consumption rate.。Helium One said in March that it had successfully raised £9.9m in December 2022 to fund the company's 2023 drilling programme in the Rukwa Basin, which is expected to be completed in the third quarter of that year.

According to MarketScreener, analysts are currently giving the stock a "buy" rating with a price target of 20p, indicating that the stock has potential to rise.

Helium One Long-Term Forecast

What is Helium One Global's 2027 share price forecast？The current share price could rise several times at any time, but in the near and long term, Helium One's share price could also collapse.。The market needs hard evidence that Tanzania's helium fields can produce high-grade helium as promised before jumping to this short-term value

Even if a major discovery is confirmed, the company will need significant additional capital to bring the product to market.。The company has already pointed out that the processing plant needs $50 million to start, with an annual output of 3.5 million cubic feet of helium.

The current estimate of the Rukwa project alone has a potential of 138 billion cubic feet.。With $6 million in operating costs and close to $100 million in revenue, the company does have the potential to make a very profitable business plan.

If positive findings are confirmed, HE1 may never need to raise additional funds。In this case, the preferred exit strategy is for a large mining company to be interested in it and come up with a purchase price that will satisfy long-term investors。Shares held by investors may not reach their maximum potential, but early returns free up funds for other investments rather than using them for more speculation, additional capital raising and greater performance risk

Is Helium One worth buying?

HE1 is the best speculative investment and the worst if it fails。Unless you're an investor who likes high risk and high returns, be cautious.。Investors are hoping for more confirmation of the profitability of helium deposits, both near-term and long-term, before pushing share prices even higher

As for analysts, Hargreaves advises investors to be cautious: "Even if it finds a commercially viable amount of resources, it will still face a protracted battle to get the project up and running and generate cash flow, and it may take years to see a return on exploration investments."

Company has not established any revenue records。At the end of 2021, the company's cash reserves are close to £10 million, so as long as the company continues to burn money at an acceptable rate, it can ensure a period of time before it needs to raise more funds for large-scale drilling operations.。If the company can extract helium and generate any revenue in 2023, the stock price could rise again.