Jessy, Jinse Finance
On December 11th, 00:30 Beijing time, Microsoft shareholders will vote on whether to include Bitcoin as part of Microsoft's asset allocation. This proposal was put forward by the National Center for Public Policy Research (NCPRP), a conservative think tank in the US, which suggests that Microsoft evaluate allocating at least 1% of its assets to Bitcoin.
At this annual shareholder meeting, shareholders will vote on this proposal. The voting result will be determined by the majority of shareholders, not the board of directors. If the proposal is approved, Microsoft will need to further evaluate and consider whether and how to include Bitcoin on its balance sheet.
What is the current attitude of major shareholders towards crypto assets?
Attitude of Major Shareholders
Vanguard Group: The world's second-largest asset manager, as of May 2024, is Microsoft's largest shareholder, holding 667.99 million Microsoft shares, accounting for 8.99% of the total outstanding shares.
In the early years, it was relatively cautious or even opposed to cryptocurrency investment, but acknowledged the value of blockchain technology.
However, its outspoken anti-cryptocurrency stance CEO Tim Buckley announced his retirement by the end of 2024, and former BlackRock executive Salim Ramji was appointed as the new CEO by Vanguard Group in May. Salim Ramji was previously responsible for BlackRock's global iShares business and was a key driver behind BlackRock's launch of a Bitcoin spot ETF.
Another detail that may represent a change in the group's attitude is that in May this year, it filed an application with the US Securities and Exchange Commission (SEC) for a new fund, mentioning digital currencies and listing digital currency-related definitions in the application, which the community believes may be a harbinger of a change in its cryptocurrency stance.
In addition, Vanguard Group holds stocks in Bitcoin mining companies.
It is currently difficult to judge its voting tendency, but given the group's shift in attitude towards virtual currency assets, it is possible that it will vote in favor this time.
BlackRock: The second-largest shareholder of Microsoft, holding 546.02 million Microsoft shares in May 2024, accounting for 7.35% of the total outstanding shares. BlackRock's Bitcoin spot ETF has a considerable asset size, and its chairman Larry Fink is also a supporter of Bitcoin. It is most likely to vote in favor.
State Street: Holds 300.35 million Microsoft shares, accounting for 4.04% of the total outstanding shares. It recognizes the potential of blockchain technology, and the group does not directly hold crypto assets, but has also been involved in the crypto field many times. In 2024, State Street collaborated with the Swiss crypto company Taurus to hold crypto assets for clients. In July 2024, there were reports that State Street Bank was developing its own stablecoin. In June 2024, State Street Global Advisors filed documents with the SEC, planning to register a crypto fund managed by Galaxy Asset Management, and State Street Global Advisors will provide management services for the fund. Even earlier in 2021, State Street Bank created a digital finance department focused on cryptocurrencies, central bank digital currencies, blockchain technology and tokenization. In addition, it also plans to integrate and upgrade its proprietary electronic trading platform to support crypto assets and other asset classes.
Given State Street's relatively active involvement in crypto-related businesses in recent years, it has a certain probability of voting in favor.
Attitude of Directors and Individual Major Shareholders
Microsoft Board of Directors: In a filing with the US SEC on October 24, 2024, Microsoft stated that the board of directors recommends that shareholders vote against the proposal to "evaluate investing in Bitcoin". The board said that the company's management has carefully considered the issue of investing in Bitcoin, believes the proposal is unnecessary, and its global finance and investment services team has evaluated a wide range of investable assets to fund Microsoft's ongoing operations, including Bitcoin, but after comprehensive consideration, they believe it is not appropriate to include Bitcoin in the company's assets.
Satya Nadella: Chairman and CEO of Microsoft, owns 801,331 Microsoft shares as of May 2024, making him one of Microsoft's largest individual shareholders.
There is no public information showing that he holds virtual currency assets. However, he has a positive attitude towards encryption technology itself, as he emphasizes user privacy protection in Microsoft's business and mentions the application of homomorphic encryption technology, and also expresses support for key custody systems, believing that such solutions may be a way to balance privacy and public security in the future.
Bradford L. Smith: President and Vice Chairman of Microsoft, holds 570,826 Microsoft shares as of May 2024. There is no public information showing that he holds crypto assets. He previously stated that Microsoft has not considered adding Bitcoin to its balance sheet. He has also publicly opposed private companies issuing digital currencies, believing that the basic task of currency issuance should be undertaken by government agencies responsible to the public, not by a few private institutions, and he does not encourage Microsoft to participate in issuing digital currencies because Microsoft is not a bank and does not want to compete with banks.
Katherine Hogan: Executive Vice President and Chief Human Resources Officer of Microsoft, holds 159,764 Microsoft shares. There is no public information on her attitude towards crypto or whether she holds crypto assets.
Reid Hoffman: LinkedIn founder, became a Microsoft director after LinkedIn was acquired by Microsoft in June 2016. He has a relatively positive and optimistic attitude towards cryptocurrencies, viewing cryptocurrencies like Bitcoin as a technology with significant transformative potential, similar to the early Internet. He also actively invests in crypto-related projects, such as Worldcoin and the Bitcoin sidechain Blockstream.
Steve Ballmer: Former CEO of Microsoft, owns about 333.25 million shares, making him Microsoft's largest individual shareholder. He has no clear public support or opposition to cryptocurrencies. There is also no public information showing whether he has personally invested in cryptocurrencies.
Bill Gates: One of the co-founders of Microsoft, reportedly held about 38.2 million Microsoft shares as of 2024. His attitude towards cryptocurrencies has generally shifted from relatively negative to relatively neutral at present. However, there is no public information showing that he holds crypto assets.
Summary:
Currently, Microsoft's board of directors clearly recommends that shareholders vote against the proposal to invest in Bitcoin. Except for BlackRock, the opinions of other major shareholders are not clear enough. However, given that investing in Bitcoin has become a trend for listed companies, Microsoft still has a certain probability of passing the proposal. If the proposal is approved, and Microsoft invests 1% of its total assets as suggested in the proposal, it would be at least $780 million to purchase Bitcoin. Such a large influx of funds into the market will directly increase the market demand for Bitcoin, and the price of Bitcoin will also rise.
