In a recent Securities and Exchange Commission filing dated Thursday, October 24, Microsoft (NASDAQ: MSFT) revealed that its “Bitcoin Investment Evaluation” will be a vote item at its next shareholder meeting on December 10. This development has ignited discussions within investing. Community on the potential direction of Microsoft’s treasury strategy and potential shareholder approval.
Microsoft Bitcoin Investment: Yes or No?
Microsoft’s Board of Directors has officially recommended voting against the Bitcoin investment proposal. In the supplementary materials foot With the SEC on October 25, the board clarified that the required assessment was redundant, stressing that Microsoft’s management already integrates cryptocurrency considerations into its broader investment strategy.
The Board highlights, “This proposal asks the Board to make an unnecessary assessment because Microsoft’s management is already carefully considering this topic. Microsoft’s global treasury and investment services team is evaluating a broad range of investable assets to fund Microsoft’s ongoing operations, including Assets that are expected to provide diversification and protection from inflation.
The filing also noted that previous evaluations included Bitcoin among other cryptocurrencies. “Previous evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to guide future decision-making,” the filing adds.
The Board of Directors affirmed its confidence in Microsoft’s current operations to manage and diversify the company’s treasury for the long-term benefit of shareholders, considering that a public evaluation is unnecessary. “Microsoft has robust and appropriate processes in place to manage and diversify the company’s treasury for the long-term benefit of shareholders and this requested public assessment is not justified.”
What do you expect
Microsoft’s shareholder base consists of a diverse mix of institutional investors, public companies, and individual investors. As of June 30, 2024, institutional investors owned approximately 43.13% of Microsoft’s outstanding shares, while public companies and individual investors held 56.84%. Insiders own a meager 0.04% of shares.
The Vanguard Group is Microsoft’s largest shareholder, owning approximately 9.09% of total shares outstanding. It is followed by BlackRock with a 7.45% stake, making it the second largest shareholder. State Street ranks third with 4.04% ownership.
Given this distribution, these key stakeholders can play a pivotal role in determining the outcome of the proposal. Vanguard’s anti-Bitcoin stance suggests a “no” vote is likely, in line with the board’s recommendation.
On the contrary, BlackRock has become a strong supporter of Bitcoin and has been offering its US clients a spot Bitcoin ETF since January this year. On their most recent earnings call, CEO Larry Fink said: “We believe Bitcoin is an asset class in itself.” He added: “It is an alternative to other commodities such as gold.”
State Street appears to be somewhat open to Bitcoin. In mid-September, State Street in collaboration with Galaxy launched 3 new cryptocurrency ETFs. In August, State Street partnered with Taurus to enhance its cryptocurrency services, facilitating the conversion of real-world assets into tradable digital assets.
However, industry analysts largely expect that the proposal to invest in Bitcoin will not gain sufficient support among Microsoft shareholders. Matthew Siegel, Head of Digital Assets Research at VanEck, Sum it up Situation in
Likewise, Nate Geraci, president of The ETF Shop and co-founder of the ETF Institute, said, Express His prediction: “We will go out on a limb and expect Microsoft’s largest shareholder (Vanguard) to vote ‘no’ on adding Bitcoin to the balance sheet…”
Day Lewis, CFO at BTC Inc Express There are strong doubts about the likelihood of Microsoft adopting Bitcoin, stating that there is a “0% chance of Microsoft adding Bitcoin to its balance sheet this decade.” Adam Cochran, a partner at CEHV, dismissed the proposal as a “fringe” idea from a think tank contributor. he male“No. This is a fringe suggestion from a contributor at a think tank, and does not represent serious consideration by Microsoft overall.”
At press time, Bitcoin was trading at $67,608.
Featured image created with DALL.E, a chart from TradingView.com
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