Bitrabo Editorial
On October 24, Microsoft Corporation (NASDAQ: MSFT) submitted a filing to the SEC indicating that they will put an “Assessment of Investing in Bitcoin” to a vote during their upcoming shareholder meeting on December 10. This announcement has sparked conversations among investors regarding the future of Microsoft’s treasury policies and the potential for shareholder approval.
Is Microsoft Moving Toward Bitcoin Investment?
The board of directors at Microsoft has recommended that shareholders vote against the proposed investment in Bitcoin. In additional documents submitted to the SEC on October 25, the board stated that the evaluation being requested is redundant since management already takes cryptocurrencies into account in their overall investment strategy.
The board explained, “This proposal requests an unnecessary review as Microsoft’s management already considers this matter thoroughly. The Global Treasury and Investment Services team assesses a variety of assets aimed at supporting Microsoft’s operations, targeting investments that offer diversification and inflation coverage.”
The documentation also pointed out that Bitcoin has been a part of previous assessments along with other cryptocurrencies. “In the past, we’ve looked at Bitcoin and other cryptocurrencies as part of our alternatives, and Microsoft continues to observe cryptocurrency trends to guide our decisions,” the filing continued.
Confidence in the existing procedures for managing Microsoft’s treasury was communicated by the board, stating that a public evaluation isn’t needed. “Microsoft has effective mechanisms in place for managing and diversifying its corporate treasury in a way that benefits shareholders over the long term, making this requested public evaluation redundant.”
Anticipated Outcomes
Microsoft’s shareholders comprise a varied group, including institutional investors, public companies, and private individuals. As of June 30, 2024, institutional investors held about 43.13% of the company’s shares, while public companies and individuals held a combined 56.84%. Insiders represented a minimal 0.04% of shares.
The Vanguard Group stands out as the largest shareholder, possessing about 9.09% of Microsoft’s outstanding shares. BlackRock follows closely with 7.45%, marking it as the second-largest shareholder, while State Street is third with a stake of 4.04%.
This ownership distribution suggests that these key investors could significantly influence the outcome of the vote. Vanguard’s opposition to Bitcoin indicates a probable “no” vote, consistent with the board’s suggestion.
On the other hand, BlackRock has shown strong support for Bitcoin, even offering a spot Bitcoin ETF to its U.S. clients since January. CEO Larry Fink has described Bitcoin as a unique asset class that serves as an alternative to traditional commodities like gold.
State Street appears to be more receptive to Bitcoin; they recently introduced new crypto ETFs in collaboration with Galaxy and partnered with Taurus. These initiatives are aimed at evolving their crypto service offerings, which enhance the capability to convert real assets into digital assets.
Despite varying opinions among shareholders, analysts predominantly believe that the proposal for a Bitcoin investment will lack enough backing to pass. Matthew Sigel of VanEck remarked on social media about the situation: “Microsoft Shareholders to Vote on Proposal to Invest in Bitcoin. MSFT Board Recommends ‘Nay’. No-Coiner Vanguard owns ~9%.”
Similarly, Nate Geraci of The ETF Store predicted Vanguard would vote “no” against adding Bitcoin to the company’s balance sheet.
Di Lewis, CFO at BTC Inc., expressed significant doubt about Microsoft’s intention to adopt Bitcoin, labeling it as having “0% chance” to be added to their balance sheet by the end of the decade. Adam Cochran from CEHV dismissed the idea as a “fringe” proposition put forth by an uninformed shareholder, stating that it does not represent serious consideration by Microsoft.
As of now, Bitcoin’s price is at $67,608.