On Tuesday, Microsoft (MSFT.O) shareholders voted down a proposal that sought to diversify assets through Bitcoin investment. This proposal was put forward by a conservative think tank called the National Center for Public Policy Research, aiming to require the Microsoft board to assess whether investing in Bitcoin aligns with the long-term interests of shareholders.
Although Bitcoin advocates like Michael Saylor actively push for Microsoft to invest in Bitcoin, the Microsoft board and shareholders opted for a cautious stance, emphasizing that the company's existing investment strategy can provide long-term benefits for shareholders. Meanwhile, the company remains attentive to the cryptocurrency market to inform future potential decisions.
As a result of this news, Bitcoin's price fluctuated dramatically, falling nearly $2,000 within an hour before recovering, hovering around $97,350 per coin at the time of publication.
Background of the proposal and supporters
Billionaire Michael Saylor is a staunch supporter of Bitcoin, and his company MicroStrategy has heavily invested in Bitcoin. He expressed support for this proposal and became a key advocate.
Saylor stated to the Microsoft board and CEO Satya Nadella that Microsoft needs to choose between holding onto the past and embracing the future, and investing in Bitcoin is key to surpassing market performance. 'Microsoft should seriously evaluate the strategic options of Bitcoin,' Saylor said.
In a tweet posted on December 1 on social platform X, he pointed out that if Microsoft were to convert its cash flow, dividends, buybacks, and debt into Bitcoin, it could potentially add 'hundreds of dollars' to its stock price and create 'trillions of dollars in corporate value,' while also reducing shareholder risk and achieving prosperity under a 'Bitcoin standard.'
The opposition stance of the Microsoft board
The Microsoft board disclosed the proposal in regulatory filings and publicly opposed it, stating that the proposal is unnecessary as the company is already considering various investment options.
The board stated that Microsoft's 'Global Finance and Investment Services Team' evaluated a range of investable assets to support the company's daily operations, including those that provide diversification, inflation protection, and mitigate significant economic loss risks due to rising interest rates.
The company added that past evaluations have listed Bitcoin and other cryptocurrencies as one of the options to consider, and Microsoft will continue to monitor trends and developments related to cryptocurrencies to guide future decisions. Microsoft further pointed out:
As mentioned in the proposal itself, the volatility of Bitcoin is a factor to consider when evaluating its investment as a financial application for businesses, as companies need stable and predictable investments to ensure liquidity and operating capital. Microsoft already has strong and appropriate processes in place to manage and diversify corporate finances for the long-term benefit of shareholders, so this request for a public evaluation of the proposal is unnecessary.
Microsoft's investment strategy
Microsoft stated that its management team already has a robust process in place to evaluate different investment options. The company's finance team focuses on selecting assets that help diversify risks, combat inflation, and protect the company from economic uncertainties.
However, market analysts believe that Microsoft's statement indicates they have not completely ruled out cryptocurrencies as a potential investment option for the future, but rather see it as an area that requires ongoing monitoring. The board believes that the high volatility of Bitcoin contradicts the company's need for stable investments, and therefore no further action is needed at this time.
Article forwarded from: Golden Ten Data
