Key Takeaways
- Microsoft shareholders have rejected a proposal from MicroStrategy chairman Michael Saylor about adding Bitcoin to its financial reserves. The decision was pushed by the company’s Board of Directors, who cited extreme volatility as the reason.
- The proposal, titled “Assessment of Investing in Bitcoin”, encourages corporate giants to adopt the apex cryptocurrency as a strategic asset due to its potential for superior annual returns, and resilience against various geopolitical and economic risks.
- In the video presentation, Saylor recommended reallocating resources from stock buybacks and bond holdings to buy BTC. He emphasized that such a move would boost Microsoft’s enterprise value while mitigating investor risk.
- Since 2020, MicroStrategy has purchased over $40 billion worth of Bitcoin for its treasury and used the asset to back its MSTR stock, which has soared by 450% in 2024. In contrast, Microsoft’s MSFT has only grown 20% this year.
Microsoft’s shareholders have voted against a proposal by the National Center for Public Policy Research urging the tech behemoth to include Bitcoin (BTC) in its financial reserves. The pushback came from the company’s board of directors who emphasized that it already evaluates a variety of investable assets within its broader investment portfolio but sees crypto as a volatile asset.
The conservative think tank has filed more than 60 proposals at Fortune 500 companies, including reviewing the supposed risks of diversity initiatives and holding Bitcoin as a hedge against inflation.
Michael Saylor-Backed Bitcoin Adoption Proposal Rejected By Microsoft Shareholders
The proposal on Bitcoin, titled “Assessment of Investing in Bitcoin”, suggested the playbook set by companies like Tesla and MicroStrategy, which have acquired billions of dollars worth of Bitcoin on their balance sheets.
MicroStrategy’s executive chairman, Michael Saylor, who backs the proposal, delivered a presentation to Microsoft’s Board of Directors last week, encouraging them to adopt the flagship cryptocurrency as a strategic asset. He explained that Bitcoin represents the next significant technological wave and the tech giant adding the digital currency to its balance sheet could substantially enhance its market valuation.
In a video shared on X, the billionaire remarked that Microsoft “can’t afford to miss” the next technological revolution.
In his presentation, Saylor compared Bitcoin’s superior annual returns to that of traditional assets like gold and fiat currency. He asserted that by integrating BTC into Microsoft’s financial strategy, it could add hundreds of dollars to its stock price and potentially increase its market capitalization by approximately $5 trillion over the next decade.
Saylor proposed the strategy of reallocating resources from stock buybacks and bond holdings into Bitcoin investments, arguing that such a move would not only boost Microsoft’s enterprise value but also mitigate shareholder risk. He underscored the apex crypto asset’s resilience against various economic and geopolitical risks that have positioned it as a robust store of value.
Microsoft’s Board of Directors Remain Skeptical of Bitcoin
Despite the MicroStrategy founder’s arguments, Microsoft shareholders decided to vote against the Bitcoin investment proposal, citing the volatility of cryptocurrencies and the company’s current strategy of focusing on less volatile assets.
Microsoft’s dismissal of the idea of a Bitcoin reserve underscores the ongoing skepticism surrounding the cryptocurrency within its leadership, which includes co-founder and long-time skeptic Bill Gates, who has criticized the asset class as speculative and risky.
Bitcoin proponents have long argued that the apex cryptocurrency, with its finite supply, would be a valuable hedge against inflation. Their advocacy even resulted in President-elect Donald Trump, a skeptic during his first term, endorsing Bitcoin and the crypto economy and promising to frame friendlier policies for the sector.
During his speech at the Bitcoin 2024 Conference in Nashville, the 47th President of the United States pledged to establish a strategic national Bitcoin stockpile that includes all the BTC seized by law enforcement that could be used to pay down the national debt, which stands at a staggering $36 trillion.
However, the idea of a strategic Bitcoin reserve was played down by economists, who argued that a chief consequence of the move would be a run-up in the price of Bitcoin at the expense of taxpayers, citing the extremely volatile nature of the market.
During a question and answer session following the meeting, Microsoft’s Chief Financial Officer Amy Hood said that the company has long been “forward-looking” when it comes to cryptocurrencies, noting that it has accepted digital currency payments in some form since 2014. She noted that the company’s goal for its balance sheet is to preserve capital, allow liquidity, and be able to fund operations, partnerships, and investments.
Nonetheless, MicroStrategy’s bet on Bitcoin has paid off. Since 2020, the company has added over $40 billion worth of the cryptocurrency to its balance sheet. Bitcoin’s surge in 2024 resulted in its stock price soaring more than 450%. In contrast, Microsoft shares are up 26% year-to-date.
At the time of writing, Bitcoin (BTC) is trading at $97,676 – up 0.65% in the last 24 hours.
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