11 hours later: Will Microsoft invest in Bitcoin? What are the voters' attitudes?

Jessy, Golden Finance

Beijing time December 11, 00:30, Microsoft shareholders will vote on whether to use Bitcoin as Microsoft's asset allocation. The proposal was put forward by the National Center for Public Policy Research (NCPRP), a conservative think tank in the United States, which recommends that Microsoft evaluate the allocation of at least 1% of its assets to Bitcoin.

At this annual shareholders' meeting, shareholders voted on the proposal. The voting results will be determined by the majority vote of shareholders, not by the board of directors. If the proposal is passed, Microsoft will need to further evaluate and consider whether and how to include Bitcoin in its balance sheet.

What is the attitude of major shareholders towards crypto assets at present?

The attitude of the company's major shareholders

Vanguard Group:The world's second largest asset management company, as of May 2024, is the largest shareholder of Microsoft, holding 667.99 million shares of Microsoft, accounting for 8.99% of the total outstanding shares.

In the early years, it was more cautious and even opposed to cryptocurrency investment, but recognized the value of blockchain technology.

However, its CEO Tim Buckley, who has a clear anti-cryptocurrency stance, announced in March 2024 that he would retire at the end of the year, and former BlackRock executive Salim Ramji was announced by Vanguard Group as the new CEO in May. Salim Ramji was responsible for BlackRock's global iShares business and was an important promoter of BlackRock's launch of the Bitcoin spot ETF.

Another detail that may represent a change in the group's attitude is that in May this year, an application for a new fund was submitted to the U.S. Securities and Exchange Commission (SEC), and digital currency was mentioned in the application document, and the definition of digital currency was listed. This is considered by the community to be a precursor to a change in its stance on cryptocurrency.

In addition, Vanguard Group holds shares in Bitcoin mining companies.

It is difficult to judge its voting tendency at present, but based on its internal attitude towards virtual currency assets, it can be inferred that there is a certain probability of voting in favor of this vote.

BlackRock Group:Microsoft's second largest shareholder, holding 546.02 million Microsoft shares in May 2024, accounting for 7.35% of the total outstanding shares. BlackRock's Bitcoin spot ETF has a considerable amount of funds, and its chairman Larry Fink himself is also a Bitcoin supporter. It is likely to vote in favor.

State Street Corporation:Holds 300.35 million shares of Microsoft, accounting for 4.04% of the total outstanding shares. It recognizes the potential of blockchain technology. The group does not directly hold crypto assets, but has also been involved in the crypto field many times. In 2024, State Street Corporation cooperated with Swiss crypto company Taurus to hold crypto assets for customers. In July 2024, it was reported that State Street Bank was developing its own stablecoin. In June 2024, State Street Global Advisors submitted documents to the U.S. Securities and Exchange Commission, planning to register a crypto fund managed by Galaxy Asset Management, and State Street Global Advisors will provide management services for the fund. Earlier in 2021, State Street Bank created a digital finance division focusing on cryptocurrencies, central bank digital currencies, blockchain technology and tokenization. In addition, it also plans to integrate and upgrade its proprietary electronic trading platform to enable it to support crypto assets and other asset classes.

Given that State Street has been actively involved in crypto-related businesses in recent years, there is a certain probability that it will vote in favor.

Attitudes of directors and major individual shareholders

Microsoft Board of Directors:In a document submitted to the SEC on October 24, 2024, Microsoft stated that the board of directors recommended that shareholders vote against the proposal to "evaluate investment in Bitcoin." The board of directors said that the company's management had carefully considered the issue of investing in Bitcoin and believed that the proposal was unnecessary. Its global financial and investment services team evaluated a wide range of investable assets to fund Microsoft's continued operations, including Bitcoin, but after comprehensive consideration, it was considered inappropriate to include Bitcoin in assets.

Satya Nadella:Chairman and CEO of Microsoft Corporation, he owns 801,331 shares of Microsoft as of May 2024 and is one of Microsoft's largest individual shareholders.

There is no public information showing that he holds virtual currency assets. However, he has a positive attitude towards encryption technology itself. For example, he pays attention to user privacy protection in Microsoft's business. He mentioned the application of homomorphic encryption technology and expressed support for the key escrow system. He believes that such solutions may be a way to balance privacy and public safety in the future.

Bradford L. Smith: President and Vice Chairman of Microsoft Corporation, holding 570,826 shares of Microsoft stock as of May 2024. There is no public information showing that he holds crypto assets. Previously, he said that Microsoft did not consider adding Bitcoin to its balance sheet. He also opposed the issuance of digital currency by private enterprises in public speeches. He believes that basic tasks such as currency issuance should be undertaken by government agencies that are responsible to the public, rather than a few private institutions, and does not encourage Microsoft to participate in the issuance of digital currency because Microsoft is not a bank and does not want to compete with banks.

Katherine Hogan: Executive Vice President and Chief Human Resources Officer of Microsoft, holding 159,764 shares of Microsoft stock. There is no public information showing his attitude towards encryption and whether he holds crypto assets.

Reid Hoffman：Founder of LinkedIn, became a director of Microsoft after LinkedIn was acquired by Microsoft in June 2016. He holds a positive and optimistic attitude towards cryptocurrencies. He regards cryptocurrencies such as Bitcoin as technologies with great potential for change, and believes that they are similar to the early Internet. He also actively invests in crypto-related projects, such as Worldcoin, Bitcoin sidechain Blockstream, etc.

Steve Ballmer：Former CEO of Microsoft, holds approximately 333.25 million shares and is the largest individual shareholder of Microsoft. He has no clear public support or opposition to cryptocurrencies. There is no public information showing whether he has personally invested in cryptocurrencies.

Bill Gates：One of the founders of Microsoft, according to relevant reports in 2024, he holds approximately 38.2 million shares of Microsoft stock. His attitude towards cryptocurrencies has generally undergone a transition from a relatively negative to a relatively neutral one. However, there is no public information showing that he holds crypto assets.

Summary:

At present, Microsoft's board of directors has clearly recommended that shareholders vote against the proposal to invest in Bitcoin. Except for BlackRock, the opinions of other major shareholders of other companies are not clear enough. However, given that investing in Bitcoin has become a trend among listed companies, Microsoft still has a certain possibility of passing the proposal. If the proposal is passed, if it invests 1% of its total assets as recommended in the proposal, it will at least $780 million to purchase Bitcoin. Such a large-scale injection of funds into the market will directly increase the market demand for Bitcoin, and the price of Bitcoin will also rise.