Will Microsoft Shareholders Vote ‘Yes’ On Bitcoin? What To Expect

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As a seasoned researcher with years of experience tracking the ever-evolving world of tech giants and digital assets, I find myself intrigued by Microsoft’s upcoming shareholder vote on Bitcoin investment. With my finger always on the pulse of the market, I have witnessed the rapid growth and acceptance of cryptocurrencies, but I also understand the cautious approach that large corporations often take in adopting new technologies.

According to a SEC filing dated October 24th, Microsoft Corporation (NASDAQ: MSFT) has announced that a discussion on whether to invest in Bitcoin will be up for vote at their upcoming shareholders’ meeting on December 10th. This news has sparked conversations among investors about the possible changes in Microsoft’s financial strategy and the chances of the decision being approved by shareholders.

Microsoft Bitcoin Investment: Yay Or Nay?

Microsoft’s board has advised shareholders to vote against the Bitcoin investment proposal, as they believe it is unnecessary given that Microsoft’s management already takes cryptocurrency considerations into account when making broader investment decisions. They made this statement in supplementary materials submitted to the SEC on October 25th.

The board is pointing out that the proposed evaluation is redundant since Microsoft’s leadership already thoroughly examines this matter. The Global Treasury and Investment Services team at Microsoft scrutinizes a broad spectrum of potential investment options to finance its ongoing operations, taking into account assets intended to offer diversification and protection against inflation.

Previous assessments have seen Bitcoin as one of several cryptocurrencies under consideration. The statement also mentions that Microsoft keeps an eye on the evolution of cryptocurrencies to guide its future decisions, which is further emphasized in the filing.

The board believes Microsoft’s current procedures are sufficient for handling and expanding their corporate treasury in a way that benefits shareholders over the long term, making a public review unnecessary.

What To Expect

Microsoft’s shareholder makeup is quite varied, encompassing institutional investors, other corporations, and private investors. As of June 30, 2024, institutional investors owned around 43.13% of the company’s outstanding shares, with public companies and individual investors collectively owning about 56.84%. Insiders held a minimal 0.04% of the shares.

As a researcher, I’ve found that The Vanguard Group is the leading shareholder of Microsoft, holding approximately 9.09% of the outstanding shares. BlackRock comes in second, owning about 7.45% of the total shares. Lastly, State Street holds the third-largest position with a 4.04% ownership stake.

In light of this distribution, these key investors might play a crucial role in deciding the fate of the proposition. Vanguard’s opposition to Bitcoin seems to indicate a probable negative vote, mirroring the board’s suggested decision.

Instead, BlackRock has taken on a supportive role for Bitcoin and has been providing US clients with a Bitcoin ETF since the start of this year. During their recent earnings call, CEO Larry Fink expressed his view that “Bitcoin represents a distinct asset class.” He further stated that it serves as an alternative to other commodities such as gold.

It appears that State Street is embracing the concept of Bitcoin to some extent. In mid-September, they joined forces with Galaxy to introduce three new cryptocurrency Exchange Traded Funds (ETFs). Earlier in August, State Street teamed up with Taurus to improve their crypto services, enabling the conversion of traditional assets into digital ones that can be traded.

Nonetheless, industry analysts largely predict that the proposal to invest in Bitcoin will not gain sufficient support among Microsoft shareholders. Matthew Sigel, Head of Digital Assets Research at VanEck, summarized the situation on X: “Microsoft Shareholders to Vote on Proposal to Invest in Bitcoin. MSFT Board Advises ‘Nay’. No-Coiner Vanguard owns ~9%.”

As an analyst, I’m sharing my perspective similar to Nate Geraci, President of The ETF Store and Co-Founder of the ETF Institute. Based on my analysis, I anticipate that Vanguard, Microsoft’s largest shareholder, will likely vote against adding Bitcoin to their balance sheet.

Lewis, Chief Financial Officer at BTC Inc., showed clear doubts about Microsoft’s possibility of adopting Bitcoin, claiming that “there’s absolutely no chance Microsoft will add bitcoin to their financial records in the coming decade.” On the other hand, Adam Cochran, a partner at CEHV, dismissed the idea as a “minority opinion” from a shareholder of a think tank, stating it is not a genuine consideration by Microsoft on a broader scale.

At press time, BTC traded at $67,608.

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2024-10-26 04:12