Yesterday, Tuesday, December 10, 2024, could have been a historic day for Microsoft and for Bitcoin.
In fact, the shareholders’ meeting of the company was called to vote on the proposal to invest in BTC, but the vote was negative.
The proposal to Microsoft to invest in Bitcoin
Yesterday, in fact, the annual meeting of Microsoft shareholders for 2024 was held.
Shareholders were asked to vote on several proposals, some coming from the company’s Board of Directors, and others coming from individual shareholders.
One of these proposals from individual shareholders was from the National Center for Public Policy Research, which asked the members to consider an investment in Bitcoin.
It was proposal number five, explicitly called “Assessment of Investing in Bitcoin”.
This proposal aimed to focus attention not only on the company’s activity but also on the preservation of its profits in the long term, and emphasized how the company not only has the duty to maximize shareholder value and increase profits, but also to protect those profits from devaluation due to inflation.
He also added that, in periods of inflation like the current one, companies should consider diversifying their balance sheets with assets that appreciate more than bonds in the long term, even if in the short term they turn out to be more volatile.
To this end, it was requested that the Board of Directors conduct an evaluation to determine whether to diversify the company’s balance sheet by including Bitcoin among its investments.
The negative outcome
The Board of Directors of the company, however, had expressed a request for a vote against this proposal, and thus there is nothing surprising about the fact that it was rejected.
All the Microsoft shareholders were able to participate in the vote, as it was held online, and although it lasted only a few minutes and the details of the vote are not known, the negative outcome apparently was clear.
The company has not released any statements on the matter.
Investment only postponed?
However, the reason declared by the Board of Directors of Microsoft in support of its position against this proposal is very interesting.
In fact, in the official document with which they presented the meeting to the shareholders, and the various proposals, regarding proposal 5 they wrote:
“This proposal requires that the Council perform an unnecessary evaluation because the management of Microsoft already considers this topic carefully”.
Furthermore, they added that Microsoft’s Global Treasury and Investment Services team is already evaluating a wide range of investable assets to finance the company’s ongoing operations, including assets that should provide diversification and protection from inflation, and to mitigate the risk of significant economic losses due to rising interest rates.
They also wrote explicitly:
“Past evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to inform future decision-making. As the proposal itself points out, volatility is a factor to consider in the evaluation of cryptocurrency investments for corporate treasury applications that require stability and predictability”.
The doubts of Microsoft on Bitcoin
From these official statements, a single strong doubt emerges regarding Bitcoin: the price volatility, particularly in the short term.
On the other hand, even if the company decided to invest in BTC, it is not at all certain that purchasing it at a price slightly below $100,000 would prove to be truly advantageous in the long term.
For example, in the event that a bullrun is followed by another bear-market, it is not to be excluded that in the coming years it may be possible to purchase it at a price lower than the current one.
There are companies that allow themselves to be swayed by the sentiment of the moment, perhaps ending up buying at high prices, while there are others more prudent that set aside sentiment and emotions, and rely solely on reason and calculations.
Other società
Something similar seems to be happening in Amazon.
In fact, there is at least one shareholder of the company who has asked that the Board of Directors consider an investment in Bitcoin.
It is possible, however, that Amazon will also follow Microsoft’s reasoning.
It should not be forgotten that in the financial markets, especially in the case of long-term investments, it is not advisable to react instinctively, and often it is not even advisable to act during times of high volatility. So perhaps Microsoft and Amazon could wait for calmer times to seriously consider an investment in BTC.
A completely different strategy, however, is that of MicroStrategy, whose founder Michael Saylor gave a three-minute presentation during yesterday’s Microsoft shareholders meeting to promote the proposal to invest in Bitcoin.
MicroStrategy, however, has now primarily become a company that invests in Bitcoin, given that practically in the current state this is the activity that yields the most.
While on one hand it is extremely difficult to imagine that many companies can follow in the footsteps of MicroStrategy, it is decidedly more plausible that they can follow in the footsteps of Microsoft or Amazon.
