Microsoft shareholders have voted ‘no’ on the Bitcoin Reserve
Microsoft shareholders voted against a proposal to add Bitcoin (BTC) to the company's balance sheet at the company's annual meeting on December 10.
The Washington, D.C.-based pro-free market National Institute for Public Policy Research (NCPPR) issued the proposal, which made it a corporate duty to diversify profits to shareholders.
Shareholders meeting
NCPPR submitted a pre-recorded video describing the proposal that was played during the shareholder meeting. Opening with the line “Microsoft can't miss the next wave of technology, and Bitcoin is that wave,” the video was filled with charts and figures showing the potential value of holding BTC.
In making its case, the group promised that bitcoin adoption would create trillions in value and “de-risk” shareholders. The video echoes comments made earlier in the text of the resolution:
“Institutional and corporate adoption of Bitcoin is becoming more common. Microsoft's second largest shareholder, BlackRock, offers its clients a Bitcoin ETF.
The proposal notes that Bitcoin is more “volatile” than corporate bonds, and therefore advises against “over-holding,” but advises against “risking shareholder value by ignoring Bitcoin entirely.”
Therefore, NCPPR recommends buying 1% to 5% of the company's profits in Bitcoin. The proposal calls for Microsoft to “conduct a review to determine whether diversifying the company's balance sheet to include bitcoin is in the long-term interests of shareholders.”
Related: What Will Happen to Bitcoin Price If Microsoft Shareholders Vote to Buy BTC?
In a 14A filing with the US Securities and Exchange Commission (SEC), Microsoft's board has publicly proposed against the proposal. In its opinion, the board dismissed the proposal as “unnecessary”, saying the company had “already considered this topic very carefully”.
“As the concept itself states, volatility is a factor to consider when evaluating cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure flexibility and functional funding.”
Too dependent on FOMO?
Much of the proposal writing seems to be based on the “fear of missing out” or “FOMO” mentality. The proposal cited both MicroStrategy and BlackRock's adoption of Bitcoin as motivating factors. The NCPPR issued similar instructions to Amazon.
However, Microsoft's board was not swayed by the vote. “Microsoft has robust and appropriate procedures to manage and distribute its corporate treasury for the long-term benefit of shareholders,” the board wrote in the aforementioned SEC filing, adding that “this requested public review is not appropriate.”
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On the record, the board recognized that MicroStrategy's operations were similar to its own, but declined to extend the comparison to the two firms' unique approaches to the cryptocurrency market.
According to the preliminary results, the shareholders will oppose the resolution and follow the instructions of the board against the use of Bitcoin.
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