Our ambition is to become one of the largest companies in the UK. I believe that our strategy gives us a credible path to achieving that goal.
At the centre of our approach is the balance sheet. We are building a balance sheet around what we believe is the best form of capital available: Bitcoin. As that balance sheet grows, it creates opportunities across the business. It can support the growth of our operating activities, enable strategic acquisitions, provide flexibility to pursue new opportunities as they emerge, and allow us to further strengthen and expand the balance sheet itself.
These are often viewed as separate strategies, but we do not see them that way. They are all connected. We have one strategy, and it revolves around building and intelligently deploying a strong balance sheet. Everything else flows from that foundation.
Because of this we think that it is important for investors and potential investors to understand this balance sheet at any moment in time and increasingly these investors include institutional investors who are used to specific metrics.
We believe the term “mNAV” is currently being used in ways that can create confusion rather than clarity. Various companies and commentators often calculate the metric differently. Some use Market Capitalisation as the numerator, while others use Enterprise Value. On the denominator side, some use Net Asset Value, while others use the market value of Bitcoin holdings, often referring to this as “BTC NAV” despite it being closer to a gross asset value than a true NAV calculation.
The treatment of outstanding securities is also a further element. We use the fully diluted number of shares which includes all in the money warrants and then factors in cash linked to the warrant proceeds, however if we were creating our analytics from the beginning, understanding everything that we know now, we would treat Smarter Convert as debt rather than an instrument that will convert into equity.
In traditional finance, mNAV generally refers to Market Capitalisation divided by Net Asset Value, producing a premium or discount multiple relative to NAV. However, many of the mNAV metrics currently used in the Bitcoin treasury company sector employ neither of these measures, resulting in a broad range of calculations that share the same label but convey very different information.
We believe this lack of standardisation becomes increasingly problematic as treasury companies introduce debt, preferred equity and other financing instruments. As capital structures become more complex, comparisons between companies become less meaningful if investors are not working from a common framework.
For this reason, we updated our analytics dashboard during the week and are moving away from mNAV as a primary valuation metric. Instead, we now display “Fully Diluted EV vs BTC Value”, calculated as Fully Diluted Enterprise Value divided by the current market value of total Bitcoin holdings. We have also added charts that show “Net Bitcoin Value Per Fully Diluted Share” and “Net Sats Per Fully Diluted Share”. For all calculations on our analytics page, you can hover over the question marks and view the formulas.
In our view, this provides a completer and more transparent picture of the value of a Bitcoin treasury company. We believe investors should also consider several important measures, including leverage or amplification, Bitcoin per share growth over time (“Bitcoin Yield”), and the sustainability of that growth going forward. The last being harder to statistically analyse.
This naturally leads to another question we were asked this week: what is the single most important metric for evaluating a Bitcoin treasury company?
Our view is that there is no single number.
Our treasury objective is straightforward: to increase the amount of Bitcoin attributable to each share over time. However, we would encourage investors to assess performance over quarters and years rather than days or weeks. The key question is whether management decisions are increasing Bitcoin per share on a sustainable basis.
For a simple, ungeared treasury company, the analysis can appear relatively straightforward. One could argue that issuing shares is accretive whenever the value received exceeds the Bitcoin value attributable to the shares issued. However, the reality becomes considerably more nuanced once debt financing, debt repayment, warrant repurchases, share buybacks and other capital allocation decisions enter the equation.
A transaction that appears dilutive when viewed through one metric may in fact be accretive when viewed through another. This is precisely why we believe the industry requires better and more transparent analytics. As treasury strategies become more sophisticated, and treasury companies become much larger, investors need to consider multiple variables rather than relying on a single ratio or headline figure.
For public companies, such as The Smarter Web Company, there is an additional dimension. Investors should not only consider the Bitcoin treasury itself, but also operating revenues, corporate costs, cash generation and the broader business activities that sit alongside the treasury strategy. These elements can have a meaningful impact on the company’s ability to grow Bitcoin per share over the long term.
If Bitcoin treasury companies are to mature into a recognised institutional asset class, the industry will benefit from greater consistency in reporting standards, valuation methodologies and performance metrics. Investors should be able to compare companies using measures that are transparent, widely understood and economically meaningful.
Over the coming months, we intend to continue refining our analytics framework and working with others across the sector to help improve consistency and comparability throughout the industry.
On Monday this week we announced an update to our ATM-style facility. We raised £145,670 (before expenses), equivalent to approximately £0.29 per share. The ATM-style facility continues to be an important part of our capital markets toolkit and provides us with valuable flexibility as we execute our strategy.
Throughout the week we continued sharing the remaining videos filmed at the Bitcoin Treasuries Unconference UK. As a reminder, early bird tickets for the 2027 event are available on our website.
Looking ahead, we have decided to rename the event series from Bitcoin Treasuries Unconference UK to Bitcoin Treasuries Conference UK. As we scale both the event and help scale the wider industry in the UK, we believe this name will be more familiar to a broader audience. The core spirit and format of the event will remain largely unchanged, but we believe this evolution will help us reach and engage a larger community.
I would also like to remind shareholders that we have an important vote at our General Meeting on 17 June. Shortly afterwards, we will announce the results via RNS. Thank you to everyone who has already taken the time to vote. Depending on your platform, there may still be an opportunity to submit your vote if you have not yet done so. Voting is an important part of share ownership, regardless of whether you vote for or against a resolution.
Finally, I would like to acknowledge that our share price is not currently performing as well as I would like. I cannot control the market, but I can control what we are building and the two certainly seem a little disconnected from where I am sitting.
While short-term market performance can be frustrating, my conviction in the direction of the business has never been stronger. I believe we are executing the right strategy, and I am excited about where we are heading. As our progress becomes more widely understood and the opportunity ahead of Smarter Web becomes clearer, I believe the market will recognise the value of what we are building.
Thank you for your support.
LSE: #SWC | OTCQB: $TSWCF | FRA: $3M8
