Cry behind the smile

I think of Smarter Web as a balance sheet, with different elements that we can use to create value for shareholders. We have our operating businesses, cash, Bitcoin, the Coinbase Strategic Credit Facility, our Ordinary Shares (SWC) and our Preferred Shares (MORE). Each plays a different role, but what I find particularly exciting is how they can all work together. The real opportunity comes from how intelligently we manage these elements to build a stronger and more valuable Smarter Web. At the centre of our balance sheet is Bitcoin. We believe Bitcoin represents an extraordinary long-term store of value, and our ambition remains to continue growing our Bitcoin treasury. However, as I have said many times, simply accumulating the largest possible number of Bitcoin is not our primary objective. What matters most is the net Bitcoin value attributable to each fully diluted Ordinary Share. This is what I mean when I talk about Bitcoin Per Share, or BPS. I believe BPS is one of the most important measures of how successfully we are managing our balance sheet and growing the underlying value attributable to shareholders. Ultimately, I believe growth in BPS should be an important driver of how the market values Smarter Web over the medium to long term. Since becoming a public company, we have delivered impressive total shareholder returns, albeit with considerable volatility along the way. We cannot control the price of Bitcoin or our equities, and the market will not always immediately recognise the progress we make. What we can control is how we manage our balance sheet, allocate capital and seek to grow BPS. My belief is that if we can consistently demonstrate accretive growth in BPS over time, the market should ultimately recognise and reward that progress, although there are no guarantees. For example, if we increase our Bitcoin holdings but issue so many Ordinary Shares, or take on so many additional financial obligations, that the net Bitcoin value attributable to each share falls, we have not necessarily created value for existing shareholders. Equally, if we can use our capital structure intelligently to increase BPS over time, I believe we have the potential to build a considerably more valuable company. This is where the different elements of our balance sheet become so important. Cash provides liquidity, flexibility and resilience. It allows us to meet our obligations, support our operating businesses and respond to opportunities without necessarily having to sell Bitcoin or raise capital at an unattractive price. Bitcoin is our primary treasury reserve asset and the foundation of our long-term treasury strategy. We want to continue accumulating Bitcoin but also ensure it is held securely and that our balance sheet remains strong enough to withstand significant volatility. Our Ordinary Shares provide access to growth capital. When market conditions and valuations are attractive, issuing Ordinary Shares can be a powerful way to increase our Bitcoin treasury and strengthen the business. However, issuing shares at the wrong price can be dilutive, which is why the economics of every capital raise matter. MORE, our Preferred Shares, provides another potential source of capital, designed for investors who are more interested in income than the growth characteristics of SWC. However, I believe the opportunity for MORE extends well beyond simply providing Smarter Web with another way to raise capital. What I find particularly exciting is the investment proposition MORE offers. The current variable annual Preferred Dividend Rate is 12%, based on its £100 reference amount, with dividends payable weekly. At the price at which we purchased MORE this week, that represented an annualised yield of approximately 14.93%. Alongside this, MORE benefits from substantial Bitcoin asset backing, a disciplined approach to leverage, with our leverage ratio currently below 15%, and our policy of maintaining a rolling cash reserve equivalent to at least two years of expected Preferred Share dividend payments. I think that combination is incredibly compelling. A substantial Bitcoin treasury providing asset backing, relatively modest leverage, a significant cash buffer supporting dividend payments and a publicly traded equity that investors can buy and sell on the London Stock Exchange. Of course, liquidity depends on market conditions, and dividends and market prices are not guaranteed. One of our biggest challenges, and potentially one of our greatest opportunities, is helping investors who are not yet familiar or comfortable with Bitcoin-backed Digital Credit to understand what it offers. Many investors are accustomed to allocating capital to areas such as private equity, property and other income-generating investments, sometimes accepting limited liquidity or complex structures in exchange for attractive returns. I believe Digital Credit has the potential to offer an interesting alternative, combining high income yields, access to public market liquidity and substantial asset backing, although the risks and characteristics are different. Bitcoin's volatility is clearly a risk that investors need to understand, but we have deliberately designed our capital structure with considerable financial resilience in mind. As more investors begin to understand Bitcoin-backed Digital Credit and compare its characteristics with traditional investments, I believe the potential market could become considerably larger. We are still at a very early stage in developing MORE. Building understanding, attracting new investors and demonstrating the strength and sustainability of the structure will take time. But I believe MORE has the potential to become a successful, widely held Preferred Share that provides attractive income for investors whilst supporting the continued growth of Smarter Web. None of these elements should be considered in isolation. Our objective is to bring them together in a way that strengthens our balance sheet, supports our operating businesses and allows us to grow BPS accretively over time. That requires discipline and patience. The best decision is not always the one that creates the most immediate activity, and I believe consistently making good capital allocation decisions gives us the best opportunity to deliver attractive long-term shareholder returns. Turning to the week itself, we made several announcements. On Monday, we published an update on our Bitcoin custody arrangements, particularly in light of recent security incidents within the wider digital asset industry. We confirmed that our Bitcoin is currently held across three established institutional custodians: Coinbase, Fidelity and Anchorage Digital. We do not hold any Bitcoin with Binance. Security is something we take extremely seriously. Our approach involves diversification across providers and jurisdictions, contractual and legal asset protections, institutional security controls, insurance-related protections and internal processes requiring multiple people to authorise significant transactions. No custody arrangement can eliminate every risk, but I believe we have built a robust framework designed to protect our Bitcoin treasury whilst maintaining the operational flexibility we need as the Company develops. On Tuesday, we announced the latest weekly dividend for MORE. The dividend for the week ending Friday 6 November is £0.2301 per Preferred Share, reflecting the current annual Preferred Dividend Rate of 12% based on the £100 reference amount. The payment date is scheduled for Monday 23 November. MORE is still a very new equity, and developing a successful market for it will take time. However, I am excited about what we have launched and the opportunity to continue developing it. On Wednesday, we announced that Smarter Web had purchased 1,775 MORE Preferred Shares at a price of £80.354 per share, for total consideration of £142,985. This represented a discount of approximately 10.7% to the original £90 IPO price. We believe MORE represents an attractive investment proposition and that its current market valuation does not fully reflect its characteristics. Our decision to purchase shares reflects that conviction but also demonstrates the importance of allocating capital differently when opportunities arise. The purchased shares are being held in treasury and will not receive dividends whilst held. We will continue considering further purchases where we believe doing so makes sense for the Company and its shareholders. Wednesday's announcement also confirmed that MORE is now quoted in the United States on the OTCID Basic Market under the ticker MORPF. This is another positive step in broadening access to MORE and developing an international investor base. On Thursday, there was no new issuance activity to report across our two at-the-market facilities. I wrote about this separately on Thursday morning, but I think it is worth reinforcing the underlying principle. Having the ability to issue shares does not mean we should issue them at any price. We want to grow Smarter Web, but we must remain disciplined about the cost of capital and the impact of every decision on existing shareholders. Later on Thursday, Miller and I hosted another Smarter Web Livestream. I always enjoy these conversations because they provide an opportunity to discuss the business, Bitcoin and the wider industry in a less formal setting than our regulatory announcements. We also released the first of a series of adverts titled the Great British Stories from Smarter Web. There will be one of these each Thursday and you can find that on my timeline also. Beyond the announcements, it has been another busy week across Smarter Web. There is a great deal happening across both our operating businesses and our Bitcoin treasury strategy. Some of that work is visible through our regulatory announcements and other communications, whilst other projects are progressing behind the scenes and cannot yet be discussed publicly. Building a business is not always easy, and there will inevitably be challenges along the way. We have experienced some of those challenges recently, particularly in the performance of our share prices, and I recognise the frustration this has caused shareholders. But I also think it is important to recognise what we have built. We have established what I believe is an extraordinary platform, combining operating businesses, a substantial Bitcoin treasury, access to public capital markets and two distinct equities designed to appeal to different groups of investors. There are opportunities ahead of us that I find incredibly exciting. Not everything we pursue will necessarily come to fruition, and progress will not always be straightforward. That is the reality of building and growing a company. But we have a talented team, a clear long-term strategy and a capital structure that I believe gives us considerable potential. We have achieved a tremendous amount in a relatively short period, and I genuinely believe we are still at an early stage in what Smarter Web could become. Our responsibility now is to continue executing, making good decisions and demonstrating that the platform we have built can create meaningful value over time. I remain incredibly optimistic about the future. As always, thank you to our shareholders and everyone who continues to support Smarter Web. We keep building. LSE: #SWC #MORE | OTC: $TSWCF $MORPF | FRA: $3M8