Microsoft shareholders voted against a proposal that would have required the company to explore investing in Bitcoin as a means of diversifying its assets. The proposal, submitted by the National Center for Public Policy Research, a conservative think tank, aimed to compel Microsoft’s board to assess the long-term benefits of Bitcoin investment for shareholder value.
Billionaire Michael Saylor, a prominent Bitcoin advocate and MicroStrategy CEO, strongly endorsed the proposal. Saylor, known for his substantial Bitcoin investments through MicroStrategy, argued that Microsoft faced a choice between clinging to outdated strategies or embracing the future with Bitcoin. He asserted that investing in the cryptocurrency was crucial for outperforming the market. In a December 1st presentation to Microsoft’s board and CEO Satya Nadella, Saylor contended that converting Microsoft’s cash flows, dividends, buybacks, and debt into Bitcoin would significantly boost the company’s stock price, potentially creating trillions of dollars in enterprise value while mitigating shareholder risk. He urged Microsoft to “evaluate its bitcoin strategic options.”
However, Microsoft’s board of directors publicly opposed the proposal, deeming it unnecessary. The board maintained that the company already evaluates a broad range of investment options, including Bitcoin and other cryptocurrencies, as part of its ongoing diversification and risk mitigation strategies. In a regulatory filing outlining their opposition, the board stated that Microsoft’s Global Treasury and Investment Services team regularly assesses various investable assets “to fund Microsoft’s ongoing operations, including assets expected to provide diversification and inflation protection, and to mitigate the risk of significant economic loss from rising interest rates.”
The company’s proxy statement further clarified that “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.” Addressing concerns about Bitcoin’s volatility, Microsoft emphasized its existing robust processes for managing and diversifying its corporate treasury, concluding that the requested public assessment of Bitcoin investment was “unwarranted.”
While Bitcoin briefly surpassed the $100,000 mark last week before retreating, the shareholder vote reflects a cautious approach towards cryptocurrency investment within the tech giant. Microsoft is expected to formally disclose the voting results in an upcoming 8-K filing. The outcome underscores the ongoing debate surrounding the role of cryptocurrencies in corporate treasury management, particularly given their inherent volatility. Despite the shareholder rejection, the discussion initiated by the proposal highlights the growing awareness of Bitcoin as a potential investment asset within mainstream corporate circles.
