Andrew Webley, the chief executive of The Smarter Web Company, a leading Bitcoin holding entity in the UK, has stated that the business is exploring acquiring rival firms facing financial difficulties. The goal is to enhance its Bitcoin reserves.
In an interview with the Financial Times, Webley indicated his willingness to consider purchasing struggling companies, which would allow The Smarter Web Company to obtain Bitcoin (BTC) at a favorable price.
Data sourced from BitcoinTreasuries.NET shows that The Smarter Web Company holds the 25th largest Bitcoin treasury globally and is the foremost holder in the United Kingdom. Their current holdings consist of 2,470 BTC, valued at approximately $275 million, making them a significant corporate Bitcoin treasury.
Webley also mentioned the company’s ambition to be included in the FTSE 100, a stock market index representing the 100 largest companies listed on the London Stock Exchange. He acknowledged that a name change for the firm is “inevitable,” but emphasized the need to implement it carefully.
Alex Obchakevich, founder of Obchakevich Research, cautioned that while acquiring assets from financially distressed crypto companies may appear advantageous due to potential discounts, the reality is often more complex.
Related: Metaplanet, Smarter Web increase Bitcoin reserves by nearly $100M
Referencing the bankruptcies of FTX and Celsius, Obchakevich explained that initial discounts of 60% to 70% often diminish to 20-50% after accounting for liabilities settled during bankruptcy proceedings, court-removed encumbrances, and taxes.
“This attracts investors with expertise because the assets are undervalued due to their urgency.“
Webley’s statements followed a nearly 22% drop in Smarter Web’s stock price on Friday, from $2.01 at market open to $1.85 at the time of reporting. This occurred despite a more than 1% increase in Bitcoin’s value over the previous 24 hours.
Over the past month, Bitcoin’s value has decreased by over 4%, while The Smarter Web Company’s stock price has fallen by approximately 35.5%.
The Smarter Web Company’s share price correction also coincides with the UK’s decision to allow retail investors access to crypto exchange-traded notes (cETNs), effective from October 8. This development provides an alternative investment option to crypto treasury companies, which were previously the most accessible regulated avenue for gaining exposure to digital assets in the UK.
Related: UK’s Smarter Web Company Secures $21M Through Bitcoin-Backed Bonds
Capitalizing on Competitors’ Difficulties
Webley’s statements regarding potential acquisitions follow reports suggesting that Bitcoin treasuries, particularly newer and smaller ones, may encounter challenges. David Duong and Colin Basco from Coinbase Research recently noted that public companies purchasing crypto are entering a more competitive phase, increasing the struggle for investor capital.
They predicted that “strategically positioned players will thrive” and inject significant capital into the crypto industry. Furthermore, analysts have indicated that this market segment is becoming increasingly saturated and that many crypto treasuries may not be sustainable in the long run.
Josip Rupena, CEO of lending platform Milo and former Goldman Sachs analyst, commented at the end of last month that crypto treasury companies share similar risks to collateralized debt obligations, which were a major factor in the 2008 financial crisis.
“There’s this aspect where people take what is a pretty sound product, a mortgage back in the day or Bitcoin and other digital assets today, for example, and they start to engineer them, taking them down a direction where the investor is unsure about the exposure they’re getting,” he explained.
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