Progress shares are anticipated to outperform the broader market over the long run. And their dividends — in the event that they pay them — are usually decrease than common.

A few of these corporations are effectively established and improve their earnings via intelligent innovation or market dominance. Others is likely to be pre-revenue hoping to discover a precious useful resource that may change its fortunes without end.

Sizzling air?

Helium One World (LSE:HE1) falls into the latter class. It’s began flowing helium to the floor of its mine in Tanzania. This implies taking a stake is much less speculative than it as soon as was. But it surely’s but to promote any gasoline so shopping for its shares stays high-risk.

That’s in all probability why it attracts a lot on-line curiosity. The prospect of watching an early-stage funding develop into one thing a lot greater is interesting.

Those who invested in, for instance, Nvidia, as a part of its January 1999 IPO will know what that seems like. However on the time, it was producing worthwhile gross sales.

Helium One hasn’t acquired that far. And that’s why it must maintain elevating cash.

The chart beneath illustrates that the corporate now has over 10 instances extra shares in difficulty than when it floated in December 2020.

This isn’t a criticism. It’s an inevitable reality of life for a enterprise that’s making losses.

Nevertheless, it doesn’t seem to have broken the corporate’s market cap an excessive amount of. Because the chart beneath reveals, there was an preliminary peak however it’s nonetheless value over £50m.

Chart by TradingView

However in case you have been rich sufficient to personal 5% of the corporate on the finish of 2020, you’d now have solely 0.84%. After all, this assumes you didn’t take part in any fundraising.

Not for me

And that’s the principal cause why I wouldn’t wish to make investments at this stage.

To keep away from my shareholding being diluted, I believe I’d must half with more money sooner or later. Nevertheless, many of the firm’s new shares have traditionally been positioned with institutional buyers at a major low cost to the prevailing market price. As a small personal investor I in all probability wouldn’t have the ability to take part, even when I wished to.

There are different the explanation why I’d be nervous about taking a stake.

Though in all probability unlikely in Tanzania, there are examples of African governments nationalising corporations with none compensation being paid.

Additionally, from an operational perspective, mining and exploration is among the most tough industries. There are quite a few issues that might go improper.

Nevertheless, get it proper, and Helium One may very well be a really profitable firm.

The gasoline is important for a lot of high-tech functions. Between now and 2030, world demand is anticipated to extend by over 40%.

And based on the corporate: “The helium market has unique supply, demand and storage dynamics, leading to almost a continual increase in prices.”

However regardless of these positives, taking a stake could be too dangerous for me. I’d moderately put money into an organization that’s promoting gasoline and worthwhile.