Finish the Math: The Smarter Web Company

The Smarter Web Company landed 7th of 8 in the CEBE scorecard. Normalized CEBE fell 9.3% from summer, placing it among the three companies where dilution outpaced accumulation. That is the headline.

The headline is also incomplete.

SWC is eleven months old as a Bitcoin treasury company. In that time it went from zero BTC to 2,695, from the Aquis Exchange to the LSE Main Market, from a web design shop to FTSE UK Index inclusion, and from a 6M market cap to briefly exceeding 1B before settling back to earth at roughly 33p. The stock is down approximately 95% from its peak. Common equity shareholders have watched a once-in-a-cycle run and a once-in-a-cycle drawdown inside the same calendar year.

This is the CEBE story. Not the stock price story, not the sentiment story. What do common shareholders actually own in Bitcoin terms, how did the capital structure get here, and what happens next.

All CEBE figures normalized to $72K BTC unless otherwise noted. FX at 1 = $1.26 throughout. Sources: RNS filings, FY2025 Annual Report, SWC dashboard, company announcements.

The Progression

SWC has four quarterly snapshots in the CEBE dataset, beginning with its first meaningful BTC position in Q2 2025.

The story breaks into two chapters. Q2 through Q4 2025 was accumulation dominance. BTC grew from 543 to 2,664 while shares grew from 228M to 300M. The treasury was being built faster than the denominator expanded and CEBE tripled.

Q1 2026 reversed the ratio. Shares grew 17.2% (from 300M to 352M) while BTC grew 1.2% (from 2,664 to 2,695). Only 31 BTC were added against 51.7 million new shares. At a prior CEBE of 795 sats, those new shares needed to bring 411 BTC to break even. They brought 31. The shortfall of 380 BTC is the entire Q1 CEBE decline in one number.

That sounds like a verdict. It isn't. The 51.7 million shares break down into two very different transactions, and understanding the distinction changes how you read the quarter.

Two Transactions, Two Purposes

Q1 2026 share issuance came from two sources.

Sats per new share were just 60 against a prior CEBE of 795. That is deeply dilutive on a quarterly basis but the mechanics behind each transaction tell different stories.

The Shard block was not a gradual drip of shares into the market. 49,999,547 shares were issued as a single block on January 2, 2026, under a December 23 subscription agreement. Those shares are legally issued and sit in the basic share count today. They hit the denominator immediately but approximately 48 million of them remain unplaced. Shard holds them and places them into the market over time, collecting a 1.75% commission, capped at 25% of weekly trading volume.

This matters because the dilution is already absorbed. Those 48 million unplaced shares are already in the 351.9 million denominator that produces the 687 sats CEBE figure. When Shard places them and converts the proceeds to BTC, the numerator grows without any additional denominator impact. No new shares need to be issued.

At sub-1x mNAV, each share Shard places sells common equity for less than its BTC backing. That is value transfer from existing holders to new buyers. At a premium mNAV, each placement sells equity above its BTC backing and the excess funds BTC accumulation. The dilution is fixed. The payoff is variable and it is entirely price dependent.

SWC's Q1 2026 investor update confirms the facility raised approximately 3.1M during the quarter, and that mNAV stood at 0.75x on a fully diluted basis at quarter end. The flywheel is running. It is running at a 25% discount to net BTC backing. Every share Shard placed in Q1 transferred value from existing holders to new buyers. The engine needs mNAV above 1x to reverse that dynamic.

This is positive convexity loaded into the share register. 48 million shares sitting in a chamber, waiting for mNAV expansion to pull the trigger. The December subscription agreement was signed after the BTC correction had begun. Management loaded this engine with eyes open during the drawdown, not during the euphoria.

The Squarebird acquisition added 1,682,033 shares at 40.13p (20-day VWAP) with a 12-month lock-up. It brought zero BTC. On a pure CEBE basis, this is dilutive. But Squarebird is not a treasury transaction. It is a business acquisition with direct implications for the wrapper fee, which we will get to.

The Capital Structure

SWC's claim stack is simpler than most companies in this dataset. One instrument, one counterparty, one maturity date.

Senior claims: 15,803,733 convertible loan note held by TOBAM, a French asset manager, subscribed through three managed funds. At 1 = $1.26, that is approximately $19.9M. There is also a 650,000 draw on the Coinbase credit facility, which is BTC-collateralized.

Cash: Approximately zero.

Drag at $72K BTC:

That is low drag relative to this dataset. SWC's capital structure is not the problem. The Q1 dilution is.

The TOBAM CLN

The convertible loan note is the single most consequential instrument in SWC's capital structure, and it matures on August 5, 2026. Four months from now.

Terms:

- Face value: 15,803,733 (~$19.9M)
- BTC in segregated wallet: 177.89 BTC
- Conversion price: 2.0475 per share
- Forced conversion trigger: 3.07125 (150% of conversion price for 10 consecutive trading days)
- Maximum conversion shares: 7,718,551
- Interest rate: zero (zero-coupon)

TOBAM subscribed to this note in August 2025. BTC was above $100K and the stock was trading in pounds, not pence. The forced conversion trigger of 3.07 was designed for a world where the equity kept appreciating. A zero-coupon note that converts into equity at a premium, no cash interest burden. Those terms made sense in the environment where they were signed.

At 33p, the plan needs a different price to work.

Three outcomes exist at maturity:

Conversion requires the stock to trade above 3.07 for 10 consecutive days. At 33p, this would require roughly a 10x recovery. Set this aside.

Cash settlement would require 15.8M in cash. The balance sheet cannot support that. Set this aside too.

BTC redemption is the most likely outcome. TOBAM receives 177.89 BTC from the segregated wallet. SWC's holdings drop from 2,695 to approximately 2,517. The CLN disappears from the claim stack and the drag goes to zero.

Here is where CEBE and BPS diverge most clearly in this dataset.

Pre-redemption at $72K:

Post-redemption at $72K:

CEBE improves 4.1%. Common equity ownership goes from 89.8% to 100%. Drag drops to zero.

Fully diluted BPS moves in the opposite direction. BPS includes the 178 BTC in the numerator and the 7.7M conversion shares in the denominator. When the note redeems instead of converts, the BTC leaves but the conversion shares were never issued. BPS drops approximately 6.6% because it modeled a conversion that never happened.

Both methods see the CLN. They model different outcomes. BPS assumes conversion and adjusts both sides. CEBE models the claim and subtracts it from the numerator. At 33p, with conversion requiring a 10x stock recovery, CEBE's read reflects the more probable resolution.

The Warrants

The Shard shares are already in the denominator. The warrant shares are not, and that distinction drives the entire timing tension.

93,066,335 pre-IPO warrants vest on approximately April 25, 2026. Exercise price: 2.5 pence per share. The stock is at 33p. Every warrant exercised creates a new share for essentially nothing. Unlike the Shard block, these shares have not been counted yet. When they arrive, the denominator jumps again with fresh dilution on top of the Shard dilution that Q1 already absorbed.

These warrants were issued at the April 2025 IPO. The exercise price matched the IPO price. At the time, they were participation instruments for early backers of a 6M web company. Eleven months later, they are potential dilution equal to 26% of the current basic share count, arriving during a bear market.

The timing is the problem. SWC needs mNAV expansion to make the Shard flywheel productive. The warrants push mNAV further below 1x at the exact moment the flywheel needs the opposite. More shares outstanding with no meaningful BTC added means lower NAV per share, which means lower mNAV, which means Shard placements at sub-1x continue to transfer value rather than create it. The warrants arrive before the engine they are diluting can engage.

But the full 93 million number overstates the near-term pressure. The majority of remaining warrants are held by related parties who were not part of the voluntary buyback offer and are presumably friendly holders within Andrew Webley's orbit. The realistic near-term exercise pressure comes from the roughly 27 million unrelated warrants, which represent under 7% of the fully diluted share count.

Management attempted a voluntary buyback in March. The March 16 RNS reported that 3 million of approximately 30 million unrelated warrants were tendered at 20.6p each, funded by a 650,000 draw on the Coinbase facility. The holders who did not tender turned down an 8x return in eleven months. That does not guarantee a soft landing on April 25, but it is a data point about holder behavior that cuts against the hardest version of the dilution thesis.

Realistic case (unrelated exercise only):

Roughly 7-8% dilution. Exercise proceeds generate a small amount of cash that buys approximately 12 BTC at $72K after FX conversion. 43 sats per new share against 687 existing CEBE.

Worst case (full 93M exercise):

26% dilution. A 19.5% decline from 687 to 553 sats. That is the maximum impact, and it is a known event with a quantifiable cost.

If related-party holders exercise and hold rather than sell, the dilution still hits the share count but there is no corresponding sell pressure on the stock. The company receives the exercise proceeds either way and can deploy them into BTC. The practical impact depends not just on how many warrants exercise but on who exercises and what they do with the shares afterward.

There is also a structural incentive to hold. CEBE already reflects the full cost of the Shard dilution. All 48 million unplaced shares are in the denominator that produces the 687 sats figure. Common equity has absorbed the toll. The trip has not been taken yet. Every share Shard places from here grows the numerator against a denominator that is already set. A warrant holder who exercises and sells before the flywheel activates is exiting a stock that has paid for an accumulation engine but has not yet received the output. The rational response to that asymmetry favors patience over exit.

The warrants are the counterweight to the Shard thesis. The Shard flywheel needs mNAV expansion. The warrants make expansion harder. That tension resolves over the next several weeks, and CEBE will capture exactly how it plays out.

The Wrapper

Every Bitcoin treasury company has a cost of existing. Board compensation, legal fees, listing costs, compliance. CEBE calls this the wrapper fee: the annual recurring cost to common equity expressed as a percentage of the BTC reserve.

SWC's wrapper, verified from the FY2025 Annual Report:

As a percentage of the BTC reserve at $72K (2,695 x $72K = $194M): approximately 1.31%. The wrapper cost is fiat-fixed while the denominator is BTC-denominated, so this percentage compresses as BTC price rises. At $97K the same wrapper runs approximately 1.01%.

Board compensation is the largest component at 1.11M. The zero-coupon CLN means no interest expense flows through the wrapper. That is a structural advantage of the TOBAM instrument, even if the rest of the CLN story is complicated.

The Squarebird offset. The acquisition RNS estimated 440,000 in conservative adjusted EBITDA. The Q1 2026 investor update provides actual numbers (unaudited): Squarebird generated 351,162 in revenue and 101,215 in net profit before tax for the quarter. SWC Operations Ltd added 88,041 in revenue and 51,111 in net profit. Combined Q1 operating revenue was 439,203 with 152,326 in net profit before tax. Annualized, that is approximately 1.76M in revenue and 609K in net profit. The wrapper table above shows 2.09M in annual recurring costs. The operating businesses are already generating revenue at a run rate that offsets a meaningful portion of the wrapper, and they are scaling.

This is a different playbook than most treasury companies. Instead of accepting the wrapper as a cost of being public and relying on BTC appreciation to overwhelm it, SWC is building revenue-generating operations to neutralize the wrapper from the other side. The acquisition at roughly 3x conservative EBITDA, with 40% recurring revenue and founders committed for three years, is infrastructure for that strategy. Those 1,682,033 dilutive shares buy a path to wrapper compression that most companies in this dataset do not have. The Q1 numbers suggest that path is ahead of schedule.

How the Pieces Connect

SWC's capital structure has four moving parts, each on a different clock and born from a different price environment.

Committed during the bull market:

The TOBAM CLN was placed in August 2025 when BTC was above $100K and the stock was measured in pounds. The conversion trigger, the zero-coupon structure, the segregated wallet. All designed for continued appreciation. At $72K and 33p, the most likely resolution is BTC redemption. CEBE improves, BPS declines and drag goes to zero. Four months remain for the verdict.

The pre-IPO warrants were set at 2.5p at the April 2025 IPO. The exercise price was never the problem, the timing is the problem. 93 million shares of potential dilution arriving during a drawdown that nobody planned for. A known cost with no structural offset.

Active decisions during the drawdown:

The Shard facility was signed in December 2025 after the correction had begun. Management chose to front-load the denominator and back-load the payoff. 48 million unplaced shares are already in the share count, waiting for mNAV expansion to activate the accumulation engine.

The Squarebird acquisition was completed in February 2026, deep in bear territory. Management was building the revenue side of the balance sheet while the BTC side was underwater. Not a treasury transaction but a wrapper compression instrument.

Two commitments designed for prices that have not materialized. Two active decisions made with full knowledge of where prices were. The capital structure is carrying both.

The $150K Math

This section appears in every deep dive in this series. It is not a price prediction. It is decision archaeology.

The capital structures across this dataset were designed, negotiated, and signed when BTC was above $100K and the widely held expectation was $150K or higher by year end. The TOBAM CLN, the warrant terms, the accumulation targets. These instruments were built for a world that assumed continued appreciation. Running the math at the price the architects had in mind is not optimism. It is context for evaluating whether the decisions were reasonable when they were made.

CEBE at $150K (current capital structure):

CEBE at $72K: 687 sats.

The difference is 41 sats, or 6%. That is modest. Most of SWC's CEBE decline from the Q4 peak of 795 is dilution, which is price-independent. Drag compression from $72K to $150K only recovers a fraction of the ground lost to share issuance.

But the static calculation misses what $150K activates.

At $150K, the TOBAM CLN's forced conversion trigger of 3.07 becomes plausible. If BTC doubles and the stock recovers with it, 10 consecutive days above 3.07 forces TOBAM to convert into 7.7M shares rather than redeem 178 BTC. SWC keeps all 2,695 BTC. The drag shifts from BTC redemption (lose 178 BTC, remove claims) to equity conversion (keep all BTC, add 7.7M shares). On a company with 352M shares outstanding, 7.7M is 2.2%. The CEBE math is better in the conversion scenario.

At $150K, the Shard flywheel likely operates above 1x mNAV. Every share placed converts to BTC at a premium to net asset value. The 48 million unplaced shares stop being an overhang and become an accumulation engine. No new dilution required. The denominator is already set. Only the numerator moves.

At $150K, the warrant dilution is still 93 million shares. That does not change with price. But the BTC purchased with exercise proceeds scales: 2.325M buys roughly 40 BTC at $72K but only about 20 BTC at $150K. The dilution is fixed. The offset shrinks with higher prices. Warrants actually become more dilutive to CEBE at higher BTC prices in sats-per-share terms.

The $150K picture is not uniformly better. It is structurally different. The CLN and the Shard facility transform from headwinds to tailwinds. The warrants remain what they are. The decisions were made for a $150K world. Whether that world arrives by August 5 determines which version of SWC's capital structure shareholders end up holding.

What Common Equity Owns

At $72K BTC, with the capital structure as it stands today:

The drag is low. The wrapper is manageable and has a credible path to compression. The CLN is zero-coupon with four months to maturity. Taken in isolation, the capital structure is clean.

The challenge is the denominator. Q1 2026 added 51.7 million shares against 31 BTC. The warrants could add up to 93 million more, though the realistic near-term pressure comes from the roughly 27 million unrelated warrants. Either way, that is significant pending dilution against a treasury that has been accumulating at roughly 3 BTC at a time since the drawdown began.

SWC's cost basis tells the same story from a different angle. 222.5M deployed for 2,695 BTC at an average cost of roughly 82,600 per BTC. At today's price of approximately 57,000, the treasury is sitting on roughly a 30% unrealized loss. That is the distance between the bull market accumulation pace and today's reality.

The next four months will resolve much of the ambiguity. If the CLN redeems in August and 178 BTC leave the treasury, CEBE rises to 715 sats with zero drag on a smaller stack. If the warrants exercise in full around April 25, CEBE drops to approximately 553 sats on 445 million shares. If both happen and exercise proceeds are deployed to BTC:

575 sats with zero drag. A smaller stack, a bigger denominator, no claims. A clean balance sheet. Whether that is good enough depends on what the Shard engine can do with it from there.

Finish the Math

SWC is not the easiest company in this dataset to evaluate and it is not the hardest. It is the one where every piece of the capital structure is in motion at the same time. The CLN matures in four months, the warrants vest in weeks, the Shard facility sits loaded, and the web business is integrating an acquisition.

The ranking said 7th of 8. CEBE down 9.3% normalized. That is accurate and it is earned. Shares grew faster than BTC in Q1 and there is no way around that arithmetic.

But the structure underneath has characteristics that the ranking alone does not capture. A placement facility that front-loaded dilution and back-loaded the payoff. A zero-coupon instrument that resolves in four months and improves CEBE regardless of which way it goes. A web business that generates actual revenue against the wrapper instead of ignoring it. And 93 million warrants that are coming whether the market is ready or not.

This is a company built for a different price. Most of them were. The question is not whether the architecture was right for $100K. It was. The question is whether the pieces that were designed for that world can survive the journey to whatever comes next.

The math is on the table.

All figures verified against RNS filings, FY2025 Annual Report, Q1 2026 Quarterly Investor Update, and company announcements. CEBE normalized to $72K BTC, 1 = $1.26 FX. Basic shares used for CEBE per framework methodology. Fully diluted shares referenced for BPS per market convention.

Track common equity Bitcoin exposure across every major treasury company. Drag. Wrapper costs. Cycle mNAV. The math BPS does not show you.

cebetracker.io | @chcbearsfan