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Microsoft Shareholders Reject Bitcoin Reserve Proposal

On December 10, 2024, Microsoft shareholders voted against a proposal to add Bitcoin (BTC) to the company’s balance sheet during the annual meeting. The resolution, proposed by the National Center for Public Policy Research (NCPPR), urged the tech giant to diversify its holdings by including Bitcoin as a strategic investment to benefit shareholders. Despite the support from some sectors, the majority of shareholders sided with Microsoft’s board, rejecting the idea.

The Proposal for Bitcoin Adoption

The NCPPR, a free-market think tank, made its case with a pre-recorded video that outlined Bitcoin’s potential as a major technological wave. The video highlighted charts and data to support the idea that holding Bitcoin could generate trillions in value for Microsoft. It argued that as institutional and corporate adoption of Bitcoin grows, Microsoft risks missing out on a significant opportunity.

The proposal recommended using 1% to 5% of the company’s profits to acquire Bitcoin. It acknowledged the cryptocurrency’s volatility but argued that diversifying into Bitcoin would hedge against risks while providing long-term benefits for shareholders.

Board’s Opposition to the Proposal

Microsoft’s board, however, formally opposed the proposal, citing concerns over Bitcoin’s inherent volatility. In a filing with the U.S. Securities and Exchange Commission (SEC), the board described the resolution as “unnecessary” and emphasized that the company already considers cryptocurrency investments carefully. The board’s statement highlighted the importance of stable and predictable investments for maintaining liquidity and operational funding.

The company further explained that while the rise of Bitcoin adoption by other companies like MicroStrategy and BlackRock was noted, Microsoft’s board believed that Bitcoin did not align with the company’s long-term treasury strategy. They stated, “Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders.”

The Influence of Bitcoin Advocates

Ahead of the shareholder vote, Bitcoin advocate Michael Saylor, the former CEO of MicroStrategy, made a case for Microsoft to embrace Bitcoin. Saylor pitched the idea of converting Microsoft’s cash flows, dividend payouts, debt, and stock buybacks into Bitcoin, claiming it could potentially add nearly $5 trillion to the company’s market cap. Despite this argument, Microsoft’s board remained unconvinced, believing that the move would not align with their current strategic goals.

The Vote and Aftermath

Preliminary results indicated that the shareholders sided with the board, rejecting the Bitcoin reserve proposal. This decision marks a significant stance by Microsoft on its approach to cryptocurrency. The company continues to focus on its tried-and-true strategy of diversifying its investments with stability in mind.

Following the rejection, the NCPPR made a similar proposal to Amazon, which will be considered during its 2025 shareholder meeting. The think tank argued that Bitcoin could serve as a hedge against inflation, pointing to the eroding value of cash reserves due to inflationary pressures.

Looking Forward

While the proposal was rejected, the growing interest in Bitcoin and other cryptocurrencies in the corporate world signals that the discussion is far from over. As the cryptocurrency market evolves, Microsoft and other corporations may continue to reassess their approach to digital assets. For now, Microsoft remains focused on maintaining a stable, diversified treasury that aligns with its long-term vision.

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