Will Amazon Buy Bitcoin? Shareholders Propose 5% Investment

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As a seasoned researcher with a keen eye for market trends and a knack for spotting potential game-changers, I find this proposal intriguing, to say the least. The idea of a tech giant like Amazon venturing into Bitcoin is not just a leap, but a quantum jump in the financial world.

Shareholders of Amazon.com Inc., represented by the National Center for Public Policy Research, have proposed that Amazon should explore the possibility of investing in Bitcoin. This suggestion, set for discussion at Amazon’s 2025 annual meeting in April, asks Amazon’s board to evaluate whether holding Bitcoin as a financial asset could best serve shareholders’ long-term interests.

Will Amazon Buy Bitcoin?

In my research proposal, I emphasize the importance of Amazon reevaluating its current treasury management strategies due to persistent inflation. To clarify, well-managed corporate assets have a significant potential for increasing shareholder value, even surpassing companies with higher profits who do not effectively invest their resources.

As per the provided sources, Amazon currently holds around $88 billion in cash, liquid assets, and marketable securities as part of its overall asset value totaling approximately $585 billion (as of September 30, 2024). The authors of this proposal suggest that rising inflation rates and low bond returns are gradually diminishing the buying power of these holdings.

As an analyst, I’ve observed that the average annual rate of inflation, as indicated by the U.S. Consumer Price Index (CPI), has been around 4.95% over the past four years, even reaching a high of 9.1%. However, it’s important to note that some experts argue that the true inflation rate might be substantially higher. Given this context, the argument posits that Amazon, in its role as a fiduciary, should take into account assets resistant to inflation.

The shareholders emphasize Bitcoin’s past performance to strengthen their argument. They highlight that by December 6, 2024, the price of Bitcoin had increased by a staggering 131% compared to the preceding year, surpassing the typical corporate bond returns by an impressive 126%.

Over a span of five years, Bitcoin’s price skyrocketed by an astounding 1,246%, significantly outperforming corporate bond returns by approximately 1,242% within that timeframe. The suggestion is that Amazon might be obligated to think about acquiring assets for its treasury that yield higher returns than bonds, even if these assets exhibit greater short-term volatility.

The document also references other publicly listed firms that hold BTC. MicroStrategy, one of the earliest corporate adopters, saw its stock outperform Amazon’s by 537% over the previous year, according to the proposal.

Additionally, notable financial institutions like BlackRock and Fidelity, who have substantial ownership in Amazon, have launched Bitcoin investment options for their clients. Moreover, these shareholders predict that U.S. government policy might evolve towards establishing a “Bitcoin strategic reserve” by 2025, which could indicate growing mainstream adoption.

As a crypto investor, I’ve been advocating for a thorough evaluation by the Board to ascertain whether integrating Bitcoin into the company’s treasury aligns with our long-term financial goals, ultimately benefiting all shareholders. This is my conclusion after careful consideration of this matter.

Following a similar move at Microsoft, Amazon is facing a push for the adoption of Bitcoin as a reserve asset. According to Bitcoinist reports, Microsoft shareholders will be voting on December 10 regarding the inclusion of Bitcoin in their treasury reserves. Despite this, analysts have pointed out that the likelihood of approval seems slim, as the Microsoft Board has advised a “no” vote.

At press time, BTC traded at $99,136.

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2024-12-09 10:11