Author: Tristan Greene, CoinTelegraph; Compiler: Baishui, Golden Finance
Microsoft shareholders voted against a resolution to include Bitcoin on the company's balance sheet at the company's annual meeting on December 10.
The National Center for Public Policy Research (NCPPR), a pro-free market think tank based in Washington, DC, proposed the resolution, which sees it as a corporate responsibility to provide value to shareholders through profit diversification.
Shareholders' Meeting
NCPPR submitted a pre-recorded video outlining their proposal, which was played at the shareholders' meeting. The video begins with "Microsoft can't miss the next wave of technology, and Bitcoin is that wave," and is filled with charts and figures that demonstrate the potential value of holding Bitcoin.
In stating the case, it promised that the adoption of Bitcoin would create trillions of dollars in value and "eliminate" risk for shareholders. The video reflects views previously expressed in the text of its resolution:
“Institutional and corporate adoption of Bitcoin is becoming increasingly common. BlackRock, Microsoft’s second-largest shareholder, offers a Bitcoin ETF to its clients.”
The proposal does note that Bitcoin is “more volatile” than corporate bonds, so it advises against holding “too much,” but it also advises against “ignoring Bitcoin entirely.”
As such, the NCPPR recommends using 1% to 5% of corporate profits to buy Bitcoin. The proposal formally asks Microsoft to “conduct an evaluation to determine whether diversification of the company’s balance sheet by including Bitcoin is in the best long-term interest of shareholders.”
In a 14A filing with the U.S. Securities and Exchange Commission (SEC), Microsoft’s board of directors formally recommended against the proposal. In its remarks, the board called the proposal “unnecessary” and said the company “has carefully considered this topic.”
“As the proposal itself notes, volatility is a factor to consider when evaluating cryptocurrency investments for enterprise financial applications that require stable and predictable investments to ensure liquidity and working capital.”
Too dependent on FOMO?
Much of the proposal appears to be based on the “fear of missing out” or “FOMO” mentality. The proposal uses MicroStrategy and BlackRock’s adoption of Bitcoin as an incentive.
On December 1, Microsoft’s board heard a three-minute presentation from bitcoin bull Michael Saylor, who claimed that if Microsoft went all-in on bitcoin, its market value could increase by nearly $5 trillion.
“Microsoft can’t miss the next technology wave, and bitcoin is that wave,” Saylor said in his pitch for Microsoft to convert its cash flow, dividend payments, debt and stock buybacks into bitcoin.
However, Microsoft’s board was unmoved before the vote. “Microsoft has strong and appropriate processes to manage and diversify the company’s funds for the long-term benefit of shareholders, and the request for a public evaluation is unwarranted,” the Microsoft board wrote in the aforementioned SEC filing.
In the filing, the board acknowledged that MicroStrategy’s operations are similar to its own, but declined to extend the comparison to the two companies’ different approaches to the emerging cryptocurrency market.
According to preliminary results, shareholders voted against the resolution and adhered to the board’s guidance against the adoption of bitcoin.
The NCPPR think tank 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 publicity 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 can hedge this risk and protect shareholder value.
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