Microsoft shareholders vote against company investing in bitcoin

Microsoft shareholders on Tuesday voted down a proposal that would've seen the tech giant explore investing in bitcoin as a means of diversifying its assets.

The proposal, which was put forward by a conservative think tank known as the National Center for Public Policy Research, would have directed Microsoft's board to conduct an assessment about whether investing in bitcoin to diversify the balance sheet was in shareholders' long-term interests. 

Billionaire Michael Saylor, who has invested heavily in bitcoin through his firm MicroStrategy, endorsed the proposal and was a prominent advocate for it. 

However, Microsoft's board of directors publicly opposed the proposal, which it said was unnecessary, because the company already considers a variety of investment options.

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Saylor argued in a presentation directed to the Microsoft board and CEO Satya Nadella that the company has a choice between clinging to the past or embracing the future with bitcoin, and said investment in the cryptocurrency is needed to outperform the market. "It's time for Microsoft to evaluate its bitcoin strategic options," Saylor said.

His presentation, which was posted to X on Dec. 1, argued that if Microsoft converted its cash flows, dividends, buybacks and debt into bitcoin it would add "hundreds of dollars to the stock price, you can create trillions of dollars of enterprise value, you can strip away risk from your shareholders, and you can prosper on the bitcoin standard."

Microsoft's board of directors disclosed the proposal in a regulatory filing and outlined their opposition to the proposal, which noted that the company's management "already carefully considers this topic."

"Microsoft's Global Treasury and Investment Services team evaluates a wide range of investable assets to fund Microsoft’s ongoing operations, including assets expected to provide diversification and inflation protection, and to mitigate the risk of significant economic loss from rising interest rates," the company wrote in its proxy statement.

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"Past evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to inform future decision making," Microsoft added.

"As the proposal itself notes, volatility is a factor to consider in evaluating cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure liquidity and operational funding," the company said. "Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders and this requested public assessment is unwarranted."

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Microsoft will publish the results of the bitcoin investment vote in an 8-K filing.

Bitcoin surpassed the $100,000 threshold for the first time last week on Wednesday night, though it has declined to about $96,000 as of Tuesday afternoon.