How to buy shares in The Smarter Web Company
You can buy shares in The Smarter Web Company via several UK investment platforms including Hargreaves Lansdown, Interactive Investor, and IG. Note that it is not available on every platform right now due to the fact that it is listed on the Aquis Exchange and not very well known.
UK investors have been piling into a little-known growth stock called The Smarter Web Company (SWC.AQ) recently. Last week, the stock was the most bought stock on Hargreaves Lansdown by number of deals.
Should you follow the crowd and buy shares in the company? Let’s take a look at what’s going on here.
What does The Smarter Web Company do?
The Smarter Web Company is a digital marketing company that has recently been buying Bitcoin. Its aim is to become a major ‘Bitcoin treasury company’ like Strategy, the company formerly known as MicroStrategy.
Listed on the UK’s Aquis Exchange, the company became publicly-listed via an Initial Public Offering (IPO) in April this year. It is run by CEO Andrew Webley, who founded the company in 2009 after previously holding a senior technology position at Hargreaves Lansdown.
Why are investors excited about The Smarter Web Company shares?
There are several reasons investors are excited about this stock. One is that US company Strategy has had great success with its Bitcoin treasury strategy. Over the last five years, its share price has risen spectacularly, pushing its market cap up to around $100 billion. Investors are hoping that this UK company can replicate its success.
Another is that the stock offers a way to get exposure to Bitcoin within a Stocks and Shares ISA or Self-Invested Personal Pension (SIPP) account. Today, many UK investors want access to digital assets such as Bitcoin. However, currently, it is not possible to buy Bitcoin or Bitcoin ETFs in a tax-efficient account in the UK. Ultimately, this company – which is akin to a Bitcoin investment fund – is filling a gap in the market.
How has the SWC share price performed?
Since the Smarter Web Company’s IPO in April, its share price has surged. Today, it is sitting near 500p, up almost 20,000% from the IPO price of 2.5p.
At the current share price, the company has a market cap of over £1bn. That would put it in the FTSE 250 index if it was trading on the UK’s main market.
Are The Smarter Web Company shares a good investment?
Looking at this company, I see it as a very high risk investment today. There are a few reasons why.
The first is that Bitcoin itself is a very volatile asset. This is an asset that tends to experience falls of 30%+ on a regular basis. If it was to experience another significant drop, the value of The Smarter Web Company’s holdings would take a big hit. This could expose investors to major losses.
The second issue is that the value of the company far exceeds the value of the Bitcoin it owns. According to recent reports, The Smarter Web Company owns 346.63 Bitcoin at present. At today’s Bitcoin price of approximately $101,500, that’s roughly £26 million of Bitcoin. Given that the company has a market cap of more than £1 billion, it looks extremely overvalued at the moment. Currently, it is trading a massive premium to its Bitcoin holdings.
The third issue is that the company is going to have to continually raise money to buy more Bitcoin. This is likely to dilute existing shareholders’ holdings.
One other issue worth mentioning is that this kind of company doesn’t really have any competitive advantage. In other words, any company can enter the market and steal market share. I think we are likely to see more Bitcoin treasury companies appear in the near future. This could lead to capital outflows here.
Now, it’s worth noting that The Smarter Web Company has a ‘
Meanwhile, there is a chance that Bitcoin could rise significantly from here. It if was to soar in value, the value of The Smarter Web Company’s BTC holdings could increase substantially.
All things considered, however, I see The Smarter Web Company shares as very risky. With this stock, one should only invest capital that they are willing to lose.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
You can contact Ed at edward@goodmoneyguide.com
