Microsoft Shareholders Decline $800M Bitcoin Investment Strategy

TLDR

• Microsoft shareholders rejected a proposal to invest 1% ($800M) of treasury in Bitcoin
• The proposal came from NCPPR and was supported by Michael Saylor of MicroStrategy
• Microsoft’s board cited Bitcoin’s volatility as a key concern
• Bitcoin price dropped 4% to $95,700 following the decision
• A similar proposal is pending for Amazon, suggesting 5% ($4.5B) allocation

Microsoft shareholders have rejected a proposal to add Bitcoin to the company’s treasury holdings during their annual meeting on December 10, 2024. The proposal, put forward by the National Center for Public Policy Research (NCPPR), suggested allocating 1% of Microsoft’s treasury to Bitcoin, which would have amounted to approximately $800 million based on the company’s current cash reserves and short-term investments.

The board of directors had previously recommended against the proposal on October 24, expressing concerns about Bitcoin’s volatility and its suitability for corporate treasury operations. The company’s Global Treasury and Investment Services team, which regularly evaluates various investment options, determined that cryptocurrencies might not align with Microsoft’s need for stable and predictable investments.

Following the announcement of the decision, Bitcoin’s price experienced a 4% decline, dropping to around $95,700. The market reaction highlighted the cryptocurrency’s sensitivity to corporate adoption decisions, particularly from major technology companies.

MicroStrategy’s Executive Chairman Michael Saylor had actively advocated for the proposal. In a three-minute presentation to Microsoft’s board of directors on December 1, Saylor argued that Bitcoin represented a fundamental component of future technological innovation. He suggested that incorporating Bitcoin into Microsoft’s treasury could help the company achieve a $5 trillion market cap by 2034.

Saylor’s company, MicroStrategy, currently holds 423,650 Bitcoin, and their stock has seen a 443% increase in 2024, reaching $371.98. The company’s shares hit an all-time high of $473.83 on November 20, surpassing previous records from the dotcom era.

The NCPPR’s proposal emphasized Bitcoin’s potential role as an inflation hedge and its possible positive impact on shareholder value. However, Microsoft’s board maintained that their existing investment evaluation processes were sufficient, making a public assessment of Bitcoin investment unnecessary.

Despite rejecting the proposal, Microsoft’s board stated they continue to monitor trends and developments in the cryptocurrency market. This approach reflects a cautious stance toward integrating digital assets into corporate financial strategies.

The decision comes at a time when corporate Bitcoin adoption remains a debated topic. While some companies have embraced cryptocurrency investments, others maintain traditional treasury management approaches focused on stability and liquidity.

A similar proposal is currently under consideration at Amazon, where the NCPPR has suggested allocating 5% of the company’s assets to Bitcoin. With Amazon holding $88 billion in cash and short-term assets, this would represent a potential $4.5 billion investment in the cryptocurrency.

The Microsoft board’s primary concerns centered on Bitcoin’s price volatility and its implications for corporate treasury management. The company emphasized the importance of maintaining stable and predictable investments to ensure operational funding and liquidity.

During the annual meeting, shareholders followed the board’s recommendation, demonstrating alignment with a more conservative approach to treasury management. The decision reflects the challenges that cryptocurrencies face in gaining acceptance as corporate treasury assets.

The voting process took place during Microsoft’s annual shareholder meeting, where various corporate governance and strategic matters were discussed. The Bitcoin proposal represented one of several items on the agenda requiring shareholder consideration.

Microsoft’s Global Treasury and Investment Services team maintains responsibility for evaluating potential investments and managing the company’s financial resources. Their assessment of Bitcoin and other cryptocurrencies factors into the broader strategy of maintaining financial stability and supporting corporate operations.

The impact of the decision extended beyond Microsoft, influencing market sentiment and potentially setting a precedent for other large corporations considering similar proposals. The cryptocurrency market’s reaction demonstrated the weight that corporate adoption decisions carry in the broader digital asset ecosystem.

This development occurs against the backdrop of increasing institutional interest in cryptocurrencies, though companies remain divided on their approach to digital asset investment. The outcome of Amazon’s pending Bitcoin proposal may provide additional insight into corporate attitudes toward cryptocurrency treasury allocation.