According to a report on December 11 by Caixin, on Tuesday Eastern Time, Microsoft's major shareholders voted against including Bitcoin on the company's balance sheet, believing it was not in the long-term interests of shareholders.
The Microsoft board had previously urged shareholders to reject a proposal from the National Center for Public Policy Research (NCPPR) that suggested the company invest 1% of its profits in Bitcoin as a hedge against inflation.
At Tuesday's annual company meeting, MicroStrategy chairman Michael Saylor delivered a three-minute speech attempting to persuade Microsoft shareholders to support the proposal. His company has invested billions of dollars in Bitcoin and achieved substantial returns.
Saylor claimed: 'If you want to achieve excess returns, you need to invest in Bitcoin. If you do so, 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, filled with a series of charts and numbers showcasing the potential value of holding Bitcoin.
NCPPR believes that while Bitcoin does have a certain level of volatility, it remains an excellent, even the best, hedge against inflation. 'Institutional and corporate investments in Bitcoin are becoming increasingly common. Microsoft's second-largest shareholder BlackRock is also offering 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, hence suggesting not to hold 'too much,' but also advising not to 'completely ignore Bitcoin,' thus exposing shareholders to the risk of asset devaluation.
Therefore, NCPPR recommends using 1% to 5% of the company's profits to purchase Bitcoin. The proposal formally requests Microsoft to assess whether diversifying the company's balance sheet by including Bitcoin aligns with the best long-term interests of shareholders.
The need for stable and predictable investments
Earlier, in a document submitted to the U.S. Securities and Exchange Commission (SEC), the Microsoft board explicitly expressed its opposition to the proposal, citing that Microsoft management had previously evaluated this topic but believed that corporate funds require stable and predictable investments to ensure liquidity and operational funding.
The majority of the content of this investment proposal seems to be based on a 'fear of missing out' or 'FOMO' mentality. However, the Microsoft board remains unmoved.
The proxy advisory firm Glass Lewis noted that experts believe there is no guarantee that investing in cryptocurrency will enhance portfolio returns. Microsoft's Vice President and Deputy General Counsel Keith Dolliver stated during the live broadcast of the shareholders' meeting that the proposal was thus rejected.
However, as Bitcoin has surged significantly, more and more people advocate for investing some corporate assets in the world's largest cryptocurrency as a hedge against inflation. Meanwhile, many corporate shareholders are increasingly engaging in crypto-related businesses, making it potentially more challenging to vote against such proposals.
People's investments in Bitcoin have also been somewhat driven by the election of President Trump, who promised cryptocurrency-friendly regulations and policies that are leading to Bitcoin's rebound, with Bitcoin hitting a historic 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 cryptocurrency, even if such investments are highly risky.'