On October 24, Microsoft Corporation (MSFT) disclosed an unexpected item in a filing with the United States Securities and Exchange Commission (SEC) for its upcoming shareholder meeting on December 10.
In addition to typical agenda items—such as director elections, auditor ratification, and discussions on AI misinformation—a unique proposal caught attention: an “Assessment of Investment in Bitcoin.” Notably, Microsoft’s board has advised shareholders to vote against this proposal.
Microsoft’s cash position and the potential Bitcoin price impact
As of its Q2 2024 financial report, Microsoft had $76 billion in cash and cash equivalents. A shareholder push for even a 10% allocation of these funds into Bitcoin would mean a substantial $7.6 billion investment.
At a Bitcoin price of $73,000, this would equate to around 104,109 BTC—about eleven times Tesla’s Bitcoin holdings, currently at 9,720 BTC. Although this would be a major acquisition, it would still trail behind MicroStrategy’s aggressive accumulation of 252,220 BTC.
With Bitcoin’s supply tightening—over 80% of BTC hasn’t moved in over six months, and exchange balances are at their lowest in four years—a purchase by Microsoft of this scale could lead to a supply shock.
The outcome depends on the shareholder vote in December. Still, the mere possibility of such a move has generated significant interest across corporate and crypto circles.
How US shareholder votes work
For public companies in the US like Microsoft, shareholder votes at annual meetings influence major decisions. Special proposals, such as one for a Bitcoin investment, are often non-binding but gauge shareholder interest and can press the company into consideration if support is high enough.
Under SEC regulations, a large shareholder can prompt a vote on specific issues, consulting all shareholders. However, Microsoft’s board has advised against the Bitcoin proposal, likely due to concerns about volatility and regulatory complexities. Still, the growing institutional interest in Bitcoin is hard to overlook.
Microsoft board member and LinkedIn founder Reid Hoffman recently shared supportive views on Bitcoin in an interview with Yahoo Finance. He highlighted Bitcoin as a digital asset with potential to reshape financial systems and was an early investor in Xapo, a prominent Bitcoin custody service provider.
If Microsoft opts to invest in Bitcoin, it has several options. The company could purchase Bitcoin directly on exchanges, as Tesla did, or it could acquire shares in a Bitcoin spot ETF, which would offer indirect exposure with liquidity benefits and regulatory oversight, reducing the need for direct asset custody.
Microsoft might also use leverage, like call options, to enhance market exposure without substantial initial outlay, allowing for speculation on price with potentially higher returns but added risk.
While an imminent investment in Bitcoin by Microsoft seems unlikely, shareholder interest underscores Bitcoin’s appeal, possibly encouraging other corporations to explore this option.
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