Microsoft shareholders voted against the resolution to add Bitcoin to the balance sheet, despite calls for investment diversification and growth potential from the National Center for Public Policy Research (NCPPR).
On 12/10, at the annual shareholder meeting, Microsoft officially rejected the proposal to invest in Bit after receiving opposition from the majority of shareholders. The proposal was submitted by NCPPR, a free-market advocacy organization, with the aim of diversifying the investment portfolio and optimizing shareholder value by leveraging the growth potential of Bit.
However, the Microsoft Board of Directors considered the proposal "unnecessary" and affirmed that the company had "carefully considered this issue".
NCPPR's argument and Microsoft's response
NCPPR argued that integrating Bit into Microsoft's investment portfolio would create trillions of dollars in value and minimize risk for shareholders. They emphasized the increasing trend of Bit adoption in the business community, citing BlackRock, Microsoft's second-largest shareholder, as providing Bit ETF products to clients.
NCPPR recommended that Microsoft use 1% to 5% of its profits to purchase Bit, and also requested the company to evaluate the long-term benefits of adding Bit to the balance sheet.
To support its argument, NCPPR presented a video at the meeting, in which Michael Saylor, a prominent Bit advocate, claimed that Microsoft could add nearly $5 trillion to its market capitalization if it invested entirely in Bit. Saylor argued that "Microsoft cannot miss the next technology wave, and Bit is that wave", and proposed that Microsoft convert its cash, dividends, debt, and share buybacks into Bit.
However, the Microsoft Board of Directors maintained its opposition. In the 14A filing with the U.S. Securities and Exchange Commission (SEC), the Board stated that the high volatility of Bit is a significant barrier to managing corporate cash, which requires stability and predictability to ensure liquidity and operating capital. They affirmed that Microsoft has an effective treasury management and diversification process, and therefore NCPPR's proposal is unnecessary.
The Board also acknowledged the similarities in the operations of Microsoft and MicroStrategy, a company that has heavily invested in Bit, but emphasized the differences in the two companies' approaches to the cryptocurrency market. The final voting results showed that Microsoft shareholders supported the Board's view, rejecting the Bit investment proposal.
This event reflects Microsoft's cautious stance towards the cryptocurrency market, despite the growth potential widely anticipated. While some large companies, such as MicroStrategy and Tesla, have actively invested in Bit, Microsoft maintains a traditional approach, prioritizing stability and predictability in financial management.
Notably, NCPPR has also submitted a similar proposal to Amazon, which is expected to be considered at the shareholder meeting in 4/2025. In this proposal, NCPPR argues that the 4.95% inflation rate according to the Consumer Price Index (CPI) is "eroding" Amazon's $88 billion in cash and short-term equivalents, and Bit could be a risk-hedging solution to protect shareholder value.
