New information has emerged indicating that Microsoft shareholders strongly opposed a proposal to invest in Bitcoin on Tuesday, despite the asset being touted as an effective hedge against inflation.
Only 0.55% of shareholders supported the proposal to purchase and hold Bitcoin. The leading cryptocurrency, with a market capitalization exceeding $100,000 per coin, surged again on Wednesday.
In accordance with the annual Microsoft Investor Relations report, 28.234 million Microsoft shareholder votes were in favor of the proposal, while an overwhelming 5.148 billion were against it, with 22.6 million abstentions.
Microsoft’s board of directors advised shareholders to reject the proposal prior to the vote, citing the cryptocurrency’s volatility.
“Bitcoin is currently a more volatile asset than corporate bonds, so companies should not jeopardize shareholder value by holding excessive amounts of it,” Microsoft stated during the shareholder meeting.
“However, given that Bitcoin is an excellent hedge against inflation, and corporate bond yields are lower than the actual inflation rate, companies should also not disregard Bitcoin entirely, risking shareholder value.”
Despite the majority of shareholders declining the proposal, Microsoft acknowledged that companies should consider the advantages of holding at least 1% of their assets in Bitcoin.
Changing tides
The final vote by Microsoft shareholders comes as several companies have begun adding the asset to their balance sheets this year as part of their corporate strategies.
Earlier this month, healthcare technology company Semler Scientific invested $30 million in Bitcoin. On Monday, the National Center for Public Policy suggested that Amazon convert at least 5% of its assets into Bitcoin, with a decision expected in the spring of next year.
Microsoft highlighted MicroStrategy as the largest private holder of Bitcoin. This company recently purchased an additional $1.5 billion in Bitcoin, increasing its total holdings to 423,650 BTC, valued at around $42 billion.
“MicroStrategy, a technology company like Microsoft, but unlike Microsoft, holds Bitcoin on its balance sheet, has seen its stock outperform Microsoft’s by 313% this year despite conducting only a fraction of the business that Microsoft does. And they are not alone,” a proxy statement revealed.
“Institutional and corporate adoption of Bitcoin is becoming more common. Microsoft’s second-largest shareholder, BlackRock, provides its clients with a Bitcoin ETF.”
Although the Bitcoin proposal was rejected, Microsoft mentioned that it assesses a wide range of assets for investment. The Global Treasury and Investment Services team at Microsoft stated that they will continue to monitor Bitcoin and cryptocurrency trends to guide future decision-making.
“As the proposal itself acknowledges, volatility is a key consideration in assessing cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure liquidity and operational funding,” Microsoft remarked.