By my calculations, Helium One Global (LSE:HE1) is up there with the most popular shares on the FTSE.

That’s because, for the 10 months ended 31 October 2024, the value of stock traded (£603.8m) was more than 11 times’ its market cap at the end of the period (£53.7m). Excluding those with a stock market valuation of less than £50m, this ratio is higher than all others on the London Stock Exchange.

Much of this interest is due to the confirmed discovery of helium in Tanzania. Helium One’s now seeking a full mining licence. If all goes to plan, it’ll be generating its first revenue from the sale of gas by the end of 2025.

This should help stem its post-tax losses which, by 30 June 2024, had reached $38.7m.

What’s the discovery worth?

At this stage, it’s impossible to assess the full financial impact of the find. That’s partly because there’s no spot price for helium. Instead, buyers enter into contracts with sellers at pre-agreed prices.

Presently, there’s insufficient global exploration (helium cannot be manufactured) to meet anticipated demand. This should help drive prices higher. At the moment, helium is 100 times more valuable than natural gas.

And demand is expected to continue to increase.

As it has the lowest boiling point of any gas, it’s suitable for many medical applications. It’s also impossible to launch spacecraft without it.

Importantly, it’s essential for the manufacture of semiconductors. This means the company can use those apparently magical two words — ‘artificial intelligence’ — to try and help woo investors.

Also, the explorer’s seeking to diversify and end its 100% reliance on Tanzania. It has a 50% interest in another helium project, with six development wells, in the US.

But despite these positives, I don’t want to invest.

Not for me

That’s because, in my opinion, it’s highly like that the company’s going to have to raise more money.

And despite its directors claiming that future fundraising rounds will be “kept to a minimum” and that they’ll be “opportunistic in the use of funds”, they acknowledge that the price at which money is raised is “outside our control”.

For example, in June, it issued new shares at a 56.5% discount to the prevailing market price.

Because the company isn’t generating any revenue, it’s on the back foot when it comes to determining the price at which new shares are offered to investors. And its operations aren’t at a sufficiently advanced stage for debt to be issued at an affordable price. Also, it’s been unable to find industry partners to help finance its operations.

Over the past two years, it’s raised $43.8m from five separate placings. Just after the company listed in December 2020, it had 139m shares in issue. Now there are 5.3bn in circulation. Assuming no further shares were bought, a 10% shareholding at IPO would now have been diluted to 0.26%.

And many of these fundraising exercises have seen small private investors excluded, meaning they couldn’t have participated even if they wanted to.

I’m therefore not interested in investing at the moment.

If I did part with some cash now, I’m confident that I’d soon have to invest more to maintain my percentage shareholding. I’d therefore rather wait until Helium One is generating revenue before considering taking a position.