Microsoft Shareholders Reject Bitcoin Reserve Proposal, Citing Volatility
Microsoft’s shareholders voted against a proposal to incorporate Bitcoin into the company’s balance sheet during the annual meeting on December 10. The resolution, proposed by the National Center for Public Policy Research (NCPPR), aimed to allocate a small portion of the firm’s profits toward Bitcoin, arguing it could diversify profits and add value to shareholders.
Details of the Proposal
The NCPPR, a Washington D.C.-based pro-market think tank, submitted the resolution through a pre-recorded video presentation, emphasizing the potential benefits of Bitcoin adoption. Key points included:
- Bitcoin represents the “next technology wave” and could create trillions in value.
- A recommendation to allocate 1-5% of profits to Bitcoin investments for diversification.
- Comparisons to Microsoft’s second-largest shareholder, BlackRock, which offers a Bitcoin ETF.
While the proposal acknowledged Bitcoin’s volatility, it argued that ignoring the cryptocurrency entirely could be a missed opportunity for shareholder value.
Microsoft’s Board Response
In a filing with the SEC, Microsoft’s board opposed the resolution, describing it as “unnecessary” and highlighting the risks associated with Bitcoin’s volatility for corporate treasury operations. The board emphasized that Microsoft already has robust processes for managing its corporate treasury with long-term shareholder interests in mind.
The board’s statement read:
“Volatility is a significant factor in evaluating cryptocurrency investments, which require stability and predictability for operational funding and liquidity.”
Shareholder Vote
Following the board’s recommendation, Microsoft shareholders voted against the resolution. The decision reflected the company’s cautious stance on cryptocurrency investments, particularly when compared to firms like MicroStrategy, which has heavily invested in Bitcoin.
Conclusion
While proponents of the proposal cited examples of institutional Bitcoin adoption, including BlackRock and MicroStrategy, Microsoft’s board and shareholders remained unconvinced. The vote reaffirms the company’s commitment to traditional financial strategies over the uncertainties of cryptocurrency investments.
