Microsoft shareholders have firmly voted down a proposal that aimed to explore adding Bitcoin to the company’s treasury holdings. This decision was made during the company’s annual shareholder meeting. The main reason behind it was the ongoing skepticism among major corporations regarding Bitcoin’s volatility and its suitability as a reliable financial asset.
The proposal, named “Assessment of Investing in Bitcoin”, was put forward by the National Center for Public Policy Research (NCPPR). This think tank suggested that Microsoft should consider setting aside 1% of its $78.4 billion in cash reserves for Bitcoin. They believed it could act as a hedge against inflation, taking advantage of the cryptocurrency’s potential as a store of value. However, Microsoft’s board had advised shareholders to reject the proposal, citing the risks linked to Bitcoin’s natural price fluctuations.
Michael Saylor’s Failed Advocacy
Michael Saylor, the Executive Chairman of MicroStrategy and one of Bitcoin’s most outspoken supporters, played a crucial role in backing the proposal. In a short three-minute presentation at the $MSFT shareholder meeting, Saylor pointed out the benefits of incorporating Bitcoin into corporate treasury strategies, using MicroStrategy’s own experience as an example. Over the past four years, MicroStrategy has acquired 21,550 BTC at a cost of $2.1 billion and has seen its stock price rise by over 2,500%, reaping significant returns.
Saylor argued that Microsoft had missed out on an opportunity to preserve and grow shareholder value. He claimed that the company had passed up an estimated $200 billion in capital gains because it focused more on dividends and stock buybacks instead of investing in Bitcoin. But despite Saylor’s convincing arguments, Microsoft’s leadership and shareholders remained unconvinced. The board stressed that the company’s financial strategy puts stability and predictability first, things that Bitcoin’s volatility can’t ensure.
Implications for Corporate Bitcoin Adoption
Microsoft’s Impact
Microsoft’s rejection of the Bitcoin proposal is a major setback for the efforts to get cryptocurrency onto the balance sheets of America’s biggest companies. Unlike MicroStrategy, which keeps growing its Bitcoin holdings, Microsoft is staying cautious. The outcome of the vote also affected market sentiment. While Microsoft’s stock stayed steady at $446 after the announcement, Bitcoin’s price dropped by 4% in the past 24 hours to $95,700. For now, Microsoft’s decision shows the cautious stance of its board, and there’s no sign of a likely change.
Broader Corporate Trends
The decision also fits into a wider trend of corporations evaluating Bitcoin’s viability. For instance, Amazon shareholders, represented by the NCPPR, recently pushed the company to allocate at least 5% of its assets to Bitcoin, citing its better long-term performance compared to corporate bonds. The think tank criticized the Consumer Price Index (CPI) as an unreliable measure of inflation and suggested that actual inflation might be twice as high, threatening the value of Amazon’s $88 billion in cash and short-term assets. They argued that Bitcoin could serve as a viable hedge against inflation and help fulfill Amazon’s fiduciary duties despite its short-term volatility.
However, while some companies like Microsoft are cautious, others are already getting involved. Nasdaq-listed Worksport (WKSP) recently announced that it’s integrating Bitcoin and XRP into its corporate treasury strategy. It plans to convert interest earnings into cryptocurrency and allocate up to 10% of excess operational cash for crypto investments. Additionally, the company will allow cryptocurrency transactions on its website, Worksport.com, with an initial total allocation capped at $5 million, subject to future adjustments by the board based on market conditions.
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