In summary
- Microsoft shareholders firmly rejected a proposal to invest in Bitcoin, with only 0.55% in favor.
- Despite the opposition, Microsoft acknowledged that companies should consider having at least 1% of their assets in Bitcoin.
- Microsoft highlighted that Bitcoin’s volatility is an important factor for companies that need stability in their investments.
New information has come to light showing that Microsoft shareholders on Tuesday strongly opposed a proposal to invest in Bitcoin, even though the asset was described as an effective hedge against inflation.
Just 0.55% of shareholders supported a proposal to buy and hold Bitcoin. The leading Cryptocurrency by market capitalization surpassed $100,000 again on Wednesday.
According to Microsoft’s annual Investor Relations report, 28.23 million Microsoft shareholder votes were cast in favor of the proposal, compared to an overwhelming 5,148 million against, with 22.6 million abstentions.
Microsoft’s board of directors urged shareholders to vote against the proposal before the vote, citing the volatility of the cryptocurrency.
“Bitcoin is a more volatile asset, at the moment, than corporate bonds, so companies should not risk shareholder value by holding too much,” Microsoft said during the shareholder meeting.
“However, since Bitcoin is an excellent, if not the best, hedge against inflation and corporate bond yields are lower than the actual inflation rate, companies should also not risk shareholder value by ignoring Bitcoin completely. “
While most shareholders rejected the proposal, Microsoft acknowledged that companies should evaluate the benefits of keeping at least 1% of their assets in Bitcoin.
Course changes
The final vote by Microsoft shareholders comes as several companies begin to accumulate the asset on their balance sheets this year as part of their corporate strategies.
Earlier this month, technology company Semler Scientific added $30 million in Bitcoin. On Monday, the National Public Policy Center recommended that Amazon convert at least 5% of its assets into Bitcoin. A decision is expected sometime in the spring of next year.
Microsoft highlighted Microstrategy as the largest private holder of Bitcoin. This company recently acquired an additional $1.5 billion in Bitcoin, bringing its total holdings to 423,650 BTC, valued at approximately $42 billion.
“Microstrategy—which, like Microsoft, is a technology company, but unlike Microsoft, keeps Bitcoin on its balance sheet—has outperformed Microsoft stock this year by 313% despite making only a fraction of the business Microsoft has. And they are not alone,” according to a statement.
“Institutional and corporate adoption of Bitcoin is becoming more common. Microsoft’s second largest shareholder, BlackRock, offers its clients a Bitcoin ETF.”
Despite rejecting the Bitcoin proposal, Microsoft noted that it evaluates a wide range of assets to invest in. Microsoft’s Global Treasury and Investment Services team said it will continue to monitor trends related to Bitcoin and cryptocurrencies “to inform future decision-making.”
“As the proposal itself notes, volatility is a factor to consider when evaluating cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure liquidity and operational financing,” Microsoft said.
Edited by Sebastian Sinclair.
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