According to a report on December 11, Eastern Time, Microsoft's major shareholders voted against including Bitcoin on the company's balance sheet, believing it does not align with shareholders' long-term interests.
Earlier, the Microsoft board urged shareholders to reject a suggestion from the National Center for Public Policy Research (NCPPR) to invest 1% of the company's profits in Bitcoin as a hedge against inflation.
At the company's annual meeting on Tuesday, MicroStrategy Chairman Michael Saylor gave a three-minute speech attempting to persuade Microsoft shareholders to support the proposal. His company has invested billions in Bitcoin and received huge returns.
Saylor claimed: 'If you want to achieve excess returns, you need to invest in Bitcoin. If you do this, the company's stock price will also rise significantly.'
NCPPR also played a video at the annual meeting, claiming that Microsoft cannot miss the next wave of technology, and Bitcoin is that wave. The video was filled with a series of charts and numbers showcasing the potential value of holding Bitcoin.
NCPPR believes that while Bitcoin has some volatility, it remains an excellent, even the best, inflation hedge tool. 'Institutional and corporate investment in Bitcoin is becoming increasingly common. Microsoft's second-largest shareholder, BlackRock, also offers Bitcoin ETFs to its clients.' Data shows that Microsoft's largest shareholders are institutional investors, including Vanguard and BlackRock.
The shareholder proposal noted that Bitcoin is more volatile than corporate bonds, thus recommending not to hold 'too much', but also advising not to 'completely ignore Bitcoin', thereby exposing shareholders to the risk of asset depreciation.
Therefore, NCPPR recommends using 1% to 5% of company profits to purchase Bitcoin. The proposal formally requests Microsoft to evaluate whether diversifying the company's balance sheet by including Bitcoin is in the best long-term interests of shareholders.
Need for stable and predictable investments
In prior submissions to the U.S. Securities and Exchange Commission (SEC), Microsoft's board explicitly expressed opposition to the proposal on the grounds that Microsoft management had previously evaluated the topic but believed that corporate funds required stable and predictable investments to ensure liquidity and operational funds.
Most of the content of this investment proposal seems to be based on the mindset of 'fear of missing out' or 'FOMO'. However, the Microsoft board is unmoved by this.
Proxy advisory firm Glass Lewis pointed out that experts believe there is no guarantee that investing in cryptocurrencies will enhance portfolio returns. Microsoft's Vice President of Legal Affairs, Keith Dolliver, stated during the live stream of the shareholders' meeting that the proposal was therefore rejected.
However, with Bitcoin soaring significantly, more and more people advocate investing some corporate assets in the world's largest cryptocurrency as a hedge against inflation. Meanwhile, many company shareholders are increasingly participating in crypto-related businesses, making it more challenging to vote against such proposals.
Investment in Bitcoin has also been partly driven by the election of President Trump, who promised crypto-friendly regulations and policies that have led to Bitcoin's rebound, with Bitcoin reaching a historical high of $100,000 this month.
Eswar Prasad, a trade policy professor at Cornell University, stated: 'Given the positive outlook for the crypto industry under the Trump administration, it is certainly reasonable for a company to invest a small portion of its reserves in cryptocurrencies, even if such investments carry high risks.'