Key Takeaways
- Polymarket traders predict that Microsoft shareholders are unlikely to support the proposal to invest in Bitcoin.
- If approved, the 1% allocation to Bitcoin would make Microsoft the 10th largest public company holding Bitcoin.
Microsoft’s shareholder vote on the bitcoin investment proposal is approaching, but traders in the prediction market see little chance of it passing.
Polimarket bookmakers predict that Microsoft shareholders will not approve the bitcoin investment proposal, estimating only an 11% probability of a favorable vote. The odds of approval initially peaked at 22% when the poll was launched, but have since declined.
According to one October submission with the SEC, the long-awaited vote will take place today at 8:30 a.m. local time, and the results are expected to be announced shortly after the meeting ends.
Microsoft’s board of directors has recommended that shareholders vote against the proposal, initiated by the National Center for Public Policy Research (NCPPR), which advocates Bitcoin as a hedge against inflation.
The board stated that the company has already evaluated a wide range of investment options, including Bitcoin, as part of its financial strategy.
What do we know about shareholders?
The outcome of the Microsoft Bitcoin vote will largely depend on the attitude of its shareholders, but who are they?
Microsoft’s shareholders include a mix of institutional investors, individual shareholders, and company board members and executives.
About 70% of Microsoft shares are held by institutional investors, with Vanguard Group, BlackRock and State Street taking major stakes, according to data from Women of Wall Street.
While many institutional investors in this group have a supportive view of Bitcoin, they tend to prioritize stability and long-term growth, which may lead them to align with the board’s recommendation against the proposal due to concerns about Bitcoin’s volatility.
Retail investors account for about 23.5% of Microsoft’s ownership. This group of investors may have different opinions. Some may support the proposal, seeing bitcoin as a potential hedge against inflation and a way to increase shareholder value, while others may share the board’s cautious view.
Insiders, including CEOs and board members, hold over 6% of the company’s stock. However, it is worth recalling that Microsoft board members are skeptical of the proposal.
Microsoft is big on AI, not crypto
Microsoft is currently focusing more on artificial intelligence (AI) than cryptocurrencies. The company has made significant investments in artificial intelligence and machine learning for 2024, aiming to integrate these technologies into its product ecosystem.
The tech giant is committed to advancing natural language processing and computer vision, which are essential for improving human-computer interaction. Microsoft has invested in total about $13 billion for OpenAI since their partnership began in 2019. This includes multiple rounds of funding, with a significant investment of $10 billion made in January 2023, which valued OpenAI at around $86 billion at the time.
While there are several indications that Microsoft will adopt Bitcoin as part of its fallback strategy, the possibility remains that the company might consider investing a small percentage of its treasury in Bitcoin. This could potentially lead to favorable results for Microsoft’s stock, similar to MicroStrategi.
Shares of MicroStrategi have seen some recent fluctuations; however, year-to-date, the company’s stock has outperformed most of the S&P 500 with an impressive gain of nearly 500%, according to Yahoo Finance data. Microsoft shares are up approximately 20% over the same period.
With Microsoft holding over $78 billion in cash and cash equivalents, allotting just 1% of these stakes in Bitcoin would represent a $784 million investment, positioning the company as the 10th largest public company holding Bitcoin.
In addition to MicroStrategi, several other public companies are also exploring Bitcoin investments. Additionally, under the incoming Trump administration, there are expectations that the US will establish a national bitcoin reserve.
If Microsoft shareholders do not approve the bitcoin investment proposal at the upcoming meeting, their next opportunity to vote will likely come at the company’s 2025 annual shareholder meeting, which is usually held in December.
Microsoft holds annual meetings to address various shareholder proposals, and any new proposals related to Bitcoin or other investments could be presented at that time.
