Microsoft Shareholders Reject Proposal for Bitcoin Investment

Michael Saylor, CEO of MicroStrategy and a well-known advocate for bitcoin, recently urged Microsoft to consider allocating part of its substantial cash reserves towards purchasing bitcoin. Saylor, whose company has heavily invested in the cryptocurrency, made this suggestion during Microsoft's annual shareholder meeting, but shareholders ultimately voted against it.

In October, a conservative think tank known as the National Center for Public Policy Research indicated its intention to suggest a shareholder proposal that would prompt Microsoft to analyze diversifying its balance sheet by investing in bitcoin. Saylor highlighted the potential benefits of incorporating bitcoin, emphasizing that Microsoft cannot afford to overlook emerging technological trends and labelled bitcoin as the next significant technological wave.

During his brief presentation, Saylor showcased a chart indicative of bitcoin's strong annual returns of 62% from August 2020 to November 2024, outpacing Microsoft’s returns of 18% and the S&P 500’s 14%. He argued that converting cash flows and dividends into bitcoin could significantly increase Microsoft's stock price.

This was not Saylor's first attempt to influence Microsoft regarding bitcoin. As of September 2023, Microsoft had approximately $78.4 billion in cash, equivalents, and short-term investments. In its proxy filing earlier, the company mentioned that its treasury team had evaluated bitcoin and other cryptocurrencies, indicating a commitment to staying informed about the evolving landscape of cryptocurrencies.

Despite Saylor’s pitches, the proposal did not receive majority support from the shareholders, particularly after Microsoft and notable proxy advisers recommended a rejection. Interestingly, Microsoft began accepting cryptocurrency payments from customers back in 2014, and its finance chief, Amy Hood, acknowledged ongoing consideration of crypto evolution in response to shareholder inquiries.

This year, Microsoft shares have reported an increase of about 19%, which is significantly lower than the remarkable performance of MicroStrategy. Under Saylor’s leadership, MicroStrategy has tied itself closely to bitcoin, turning from a standard software company to a major entity in the cryptocurrency sector. The company first declared its intention to invest in bitcoin in mid-2020, at a time when its market cap stood at roughly $1.1 billion.

As of November 10, MicroStrategy owned around 279,420 bitcoins, purchased for an aggregate price of about $11.9 billion, with current holdings worth over $26.5 billion due to bitcoin trading at $95,000. To finance these investments, MicroStrategy has engaged in stock sales and taken on debt, recently completing a $3 billion convertible debt sale to fund further bitcoin acquisitions.

As a result of these ventures, Saylor's net worth has surged to approximately $9.1 billion, primarily due to his stake in MicroStrategy. His vision remains that companies like Microsoft can explore new avenues of wealth by embracing innovative assets like bitcoin.

Microsoft, Bitcoin, Shareholders