On December 10, 2024, at the Annual Meeting of Microsoft Shareholders, shareholders disapproved the proposal to investigate Bitcoin’s addition to the company’s treasury holdings.
The proposal, titled “Assessment of Investing in Bitcoin,” was introduced to the National Center for Public Policy Research (NCPPR), calling for a 1% investment of Microsoft cash reserves, estimated at $78.4 billion, in Bitcoins to guard against inflation. However, shareholders, despite seeing benefits, are gravely concerned about the volatility of the digital currency and the likelihood of it being a robust financial asset.
Microsoft’s Board Opposes Bitcoin Investment
According to NCPPR’s view, investing in Bitcoin could also provide Microsoft with diverse portfolios and protection from inflationary pressure. The argument against this tax is that one could lose out on some advancements in technology and financial opportunities. This think tank underlined the fact that Bitcoin is a new wave of technology wherein the company could create substantial value for the company.
Michael Saylor, Executive Chairman of MicroStrategy and one of the most visible proponents of Bitcoin investments, was instrumental in driving the proposition. In minute presentations, Saylor brought out MicroStrategy’s evidence of success with Bitcoin; the company, he noted, had amassed in excess of 21,000 BTC and experienced remarkable appreciation of stock value since adopting Bitcoin into its treasury strategy.
He maintained that Microsoft probably forfeited about $200 billion of capital gains by opting for dividends and stock buybacks rather than investing in bitcoins.
Arguments for Bitcoin Investment
According to Saylor, Bitcoin could change the way corporates approach their treasury strategies, and Microsoft could add considerable shareholder value to its annual reports by using cryptocurrency within its financial model. However, the arguments seem compelling; nevertheless, the board at Microsoft did not agree with them.
The board of Microsoft had earlier recommended the shareholders disallow the proposal. It mentioned the reason being the highly volatile nature of Bitcoin, which was unsuitable for the financial strategy- the stability and predictability that the company intended to have.
To justify their proxy statement, the board even stated that Microsoft already evaluates a diverse array of investable assets and has treated cryptocurrencies among the options but found them inappropriate for their treasury management.
Microsoft’s Conservative Approach Reflects Industry Trends
The views of the board are in line with a trend among large corporations that are cautious about using cryptocurrencies in their balance sheets. They prefer investments that are liquidity and operating expenditure-friendly, not something guaranteed by the price volatility of Bitcoin.
At around $446 per share, Microsoft’s stock was stable following the announcement of the voting result. In contrast, Bitcoin saw a decline of nearly 4% to $95,700 in the following 24 hours once the decision was made public. This once again demonstrates the effect of corporate decisions on the market sentiment regarding cryptocurrencies.
Market Impact and Outlook
The refusal from Microsoft about the proposal of Bitcoin is bound to end as a disappointment for advocates of integration of cryptocurrency into finance strategies of corporate businesses. While companies like MicroStrategy continue to expand their Bitcoin holdings, Microsoft’s cautious approach underscores ongoing scepticism in corporate America regarding digital currencies.
Also, this decision corresponds to the kind of thing we are seeing today in several other major corporations. The shareholders of Amazon recently recommended their company invest some cash in a bitcoin asset as well, arguing this was for long-term performance benefits over traditional investments like corporate bonds.
With this shareholder vote outcome, Microsoft keeps a cautious mood towards cryptocurrencies, like any other big company. Supporters like Michael Saylor keep pushing for their views about putting Bitcoin as a strategic asset in treasury.
Still, volatility and risk management will remain significant hurdles for further acceptance as they relate to corporate treasury strategies. The final verdict would depend on market dynamics and developments in regulation when more companies evaluate their positions on digital currencies.
Stay connected to learn more with TurkishNY Radio by following us on the Twitter and LinkedIn, and join our Telegram channel for more real time updates and insights.
