Author: Tristan Greene, CoinTelegraph; Translated by: Bai Shui, Jinse Finance
Microsoft shareholders voted against the resolution to include Bitcoin on the company's balance sheet at the annual meeting on December 10.
The National Center for Public Policy Research (NCPPR) is a free-market think tank based in Washington, D.C., which proposed this resolution, viewing value creation for shareholders through profit diversification as a corporate responsibility.
Shareholders' Meeting
NCPPR submitted a pre-recorded video outlining their proposal, which was played at the shareholders' meeting. The video opened with 'Microsoft cannot miss the next technological wave, and Bitcoin is that wave', and was filled with charts and figures showcasing the potential value of holding Bitcoin.
In stating its case, it promised that adopting Bitcoin would create trillions of dollars in value and 'eliminate' risks for shareholders. The video reflected views previously expressed in its resolution text:
'The adoption of Bitcoin by institutions and corporations is becoming increasingly common. BlackRock, Microsoft's second-largest shareholder, offers Bitcoin ETFs to its clients.'
The proposal indeed points out that Bitcoin is 'more volatile' than corporate bonds, and thus suggests not to hold 'too much', but also advises not to 'completely ignore Bitcoin'.
Therefore, NCPPR recommends using 1% to 5% of company profits to purchase Bitcoin. The proposal formally requests Microsoft to 'conduct an assessment to determine whether diversifying the company's balance sheet by including Bitcoin is in the best long-term interests of shareholders.'
In the 14A filing submitted to the U.S. Securities and Exchange Commission (SEC), Microsoft's board formally recommended opposing this proposal. The board stated that the proposal was 'unnecessary' and noted that the company had 'carefully considered this topic'.
'As the proposal itself indicates, volatility is a factor that needs to be considered when evaluating cryptocurrency investments for corporate financial applications, which require stable and predictable investments to ensure liquidity and operating capital.'
Too reliant on FOMO?
Much of the proposal seems to be based on a mindset of 'fear of missing out' or 'FOMO'. The proposal cites MicroStrategy and BlackRock's adoption of Bitcoin as motivating factors.
On December 1, Microsoft's board heard a three-minute speech from Michael Saylor, who is bullish on Bitcoin, claiming that if Microsoft fully invested in Bitcoin, its market value could increase by nearly $5 trillion.
'Microsoft cannot miss the next technological wave, and Bitcoin is that wave,' Saylor said in his lobbying, suggesting Microsoft convert its cash flow, dividend payments, debt, and stock buybacks into Bitcoin.
However, Microsoft's board remained unmoved before the vote. In the aforementioned SEC submission, the board wrote: 'For the long-term benefit of shareholders, Microsoft has robust and appropriate processes to manage and diversify company funds, and the request for a public assessment is unfounded.'
In the document, the board acknowledged that MicroStrategy's operations are similar to its own but refused to expand the comparison to the differing approaches of the two companies toward the emerging cryptocurrency market.
According to preliminary results, shareholders voted against the resolution and adhered to the board's guidance opposing Bitcoin adoption.
NCPPR submitted a similar proposal to Amazon on December 8, which will be considered at the company's shareholders' meeting in April 2025.
NCPPR stated in its promotion that the 4.95% consumer price index inflation rate is rapidly eroding Amazon's $88 billion in cash and short-term cash equivalents, and Bitcoin could hedge against this risk, protecting shareholder value.
