Microsoft shareholders voted against the resolution to add Bitcoin to the balance sheet, despite calls for investment diversification and growth potential from the National Center for Public Policy Research (NCPPR).
On December 10, at the annual shareholder meeting, Microsoft officially rejected the proposal to invest in Bitcoin after receiving opposition from the majority of shareholders. The proposal was put forward by NCPPR, a free-market advocacy organization, aimed at diversifying the investment portfolio and optimizing shareholder value by leveraging the growth potential of Bitcoin.
However, Microsoft's board believes this proposal is 'unnecessary' and asserts that the company has 'carefully considered this issue.'
NCPPR's argument and Microsoft's response
NCPPR argues that integrating Bitcoin into Microsoft's investment portfolio would create trillions of dollars in value and reduce risks for shareholders. They emphasize the increasing trend of Bitcoin adoption in the corporate world, citing that BlackRock, the second-largest shareholder of Microsoft, has offered a Bitcoin ETF to its clients.
NCPPR recommends Microsoft use 1% to 5% of its profits to buy Bitcoin, while urging the company to conduct an assessment of the long-term benefits of adding Bitcoin to its balance sheet.
To strengthen its argument, NCPPR presented a video at the meeting, in which Michael Saylor, a prominent Bitcoin advocate, asserted that Microsoft could add nearly $5 trillion to its market capitalization if it invested entirely in Bitcoin. Saylor argued that 'Microsoft cannot miss the next technology wave, and Bitcoin is that wave,' while suggesting Microsoft convert its cash flow, dividends, debt, and stock buybacks into Bitcoin.
However, Microsoft's board of directors remains firmly opposed. In a 14A filing with the U.S. Securities and Exchange Commission (SEC), the board stated that the high volatility of Bitcoin poses a significant barrier to managing corporate treasury, which requires stability and predictability to ensure liquidity and operating capital. They asserted that Microsoft already has an effective treasury management and diversification process, making NCPPR's proposal unnecessary.
The board also acknowledged the similarities between Microsoft's operations and those of MicroStrategy, a company that has heavily invested in Bitcoin, but emphasized the differences in their approaches to the cryptocurrency market. The final voting results showed that Microsoft shareholders supported the board's view and rejected the Bitcoin investment proposal.
This event reflects Microsoft's cautious stance towards the cryptocurrency market, despite the growth potential many expect. While some large companies like MicroStrategy and Tesla have actively invested in Bitcoin, Microsoft continues to maintain a traditional approach, prioritizing stability and predictability in financial management.
Notably, NCPPR has also submitted a similar proposal to Amazon, expected to be considered at the shareholder meeting in April 2025. In this proposal, NCPPR argues that the 4.95% inflation rate according to the Consumer Price Index (CPI) is 'eroding' the value of Amazon's $88 billion in cash and short-term equivalents, and Bitcoin could be a risk-hedging solution to protect shareholder value.
