Microsoft Advises Shareholders Against Investing Corporate Cash in Bitcoin
As the year draws to a close, Microsoft is preparing for its annual shareholder meeting scheduled for December 10th. Among the “voting items” on this year’s agenda is a proposal to diversify Microsoft’s assets and enhance shareholder value by investing in Bitcoin, as indicated in a Securities and Exchange Commission filing released on Thursday. The company’s board of directors is recommending shareholders vote against it.
The proposal, titled “Assessment of Investing in Bitcoin,” argues that Microsoft’s current investment in corporate bonds is barely outpacing inflation rates and suggests diversifying their assets with Bitcoin, which is cited as an “excellent, if not the best, hedge against inflation.”
The proposal states, “Therefore, in inflationary times like these, corporations should—and perhaps have a fiduciary duty to—diversify their balance sheets with assets that appreciate more than bonds, even if those assets are more volatile in the short-term.”
Beneath the proposal, there is a “Board Recommendation” section where Microsoft’s board of directors advises shareholders to oppose the proposal. The board explains that the company already considers the topic of investing in Bitcoin carefully and does not need to reassess it, as stated in the filing.
The tech giant, with Vanguard, BlackRock, and State Street as its top shareholders, mentions having a Global Treasury and Investment Services team that regularly evaluates various potential investments to diversify Microsoft’s assets and safeguard shareholders from inflation. Microsoft has previously considered Bitcoin and other cryptocurrencies in these evaluations, as outlined in the filing.
“Microsoft has robust processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders, making this requested public assessment unnecessary,” the filing affirms.
The proposal was put forth by The National Center for Public Policy, a conservative think tank, which is also an advisory board member of Project 2025, a far-right policy initiative aiming to expand presidential power and establish a traditionalist social order under the next Republican administration.
The proposal suggests that while Microsoft should explore investing in Bitcoin, it should avoid risking shareholder value by allocating too much of its assets to the cryptocurrency. The organization recommends that Microsoft “evaluate the advantages of holding some, even just 1% of its assets in Bitcoin.”
This proposal comes amidst MicroStrategy, another major tech company, achieving a record high of $241 this year due to its successful pivot towards Bitcoin investment. The company has amassed 252,220 Bitcoins since 2020, valued at approximately $17 billion.
As a result, MicroStrategy’s stock has surged by 250% over the past year, while Microsoft has seen a 16% increase. Learn more about cryptocurrency with short, easy-to-read lesson cards. Click here for Fortune’s Crypto Crash Course.
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