Michael Saylor's case for Microsoft buying bitcoin gets rejected by shareholders

Michael Saylor, the billionaire bitcoin investor who turned the company he co-founded, MicroStrategy, into a high-risk proxy for the cryptocurrency, has been encouraging Microsoft to use some of its massive cash pile to follow his lead.

But on Tuesday, after he presented a proposal at Microsoft's annual shareholder meeting, the shareholders said no.

In October, Microsoft told investors that the National Center for Public Policy Research, a conservative think tank, intended to submit a shareholder proposal recommending that the software company's board look at diversifying its balance sheet with bitcoin.

Saylor, now MicroStrategy's executive chairman, has seen his company's stock price soar almost 500% this year as it buys billions of dollars worth of bitcoin.

"Microsoft can't afford to miss the next technology wave, and bitcoin is that wave," Saylor said in a video presentation, which he released on X last week. The post has more than 3 million views.

In his three-minute presentation, Saylor displayed a chart showing that bitcoin generated annual returns of 62% between August 2020 and November 2024, compared with 18% for Microsoft and 14% for the S&P 500. Bonds as an asset class have lost 5%, the presentation says.

"You can convert your cash flows and your dividends and your buybacks and your debt into bitcoin," Saylor said. "If you do that, you'll add hundreds of dollars to the stock price."

The virtual appearance Tuesday wasn't the first time Saylor has made the pitch to Microsoft, which was sitting on $78.4 billion worth of cash, equivalents and short-term investments, as of the end of September.

Microsoft said in its proxy filing in October that its treasury and investment services team previously evaluated bitcoin and other cryptocurrencies to fund the company's operations and reduce economic risk, and "continues to monitor trends and developments related to cryptocurrencies to inform future decision making."

A day later, Saylor directly addressed Microsoft CEO Satya Nadella on X.

"Hey @SatyaNadella, if you want to make the next trillion dollars for $MSFT shareholders, call me," Saylor wrote.

The proposal failed to garner support from a majority of voting shareholders, after Microsoft recommended they reject it. Proxy advisors Glass Lewis and Institutional Shareholder Services both suggested a no vote, too.

Microsoft started accepting cryptocurrency for customer payments in 2014, Amy Hood, Microsoft's finance chief, said in response to a shareholder question during Tuesday's meeting. "We continue to think about the evolution of crypto," she said.

Microsoft shares have gained about 19% so far this year, far underperforming MicroStrategy.

But Saylor has tied his company, now valued at about $83 billion, directly to the fortunes of bitcoin. In mid-2020, the company, which had been a middling software business, announced its plan to invest in bitcoin, disclosing in an earnings call that it would commit $250 million over the next 12 months to "one or more alternative assets," which could include digital currencies such as bitcoin. At the time, MicroStrategy's market cap was about $1.1 billion. 

As of Dec. 8, MicroStrategy and its subsidiaries owned a total of about 423,650 bitcoins, acquired at an aggregate price of roughly $26.5 billion. With bitcoin trading at $95,000, those holdings are worth over $41.3 billion.

MicroStrategy has been selling stock and raising debt to help fund its bitcoin purchases. The company said on Nov. 21 that it had completed a $3 billion convertible debt sale "to acquire additional bitcoin and for general corporate purposes."

Saylor's net worth has ballooned to $9.1 billion, according to Forbes, primarily due to his MicroStrategy ownership.

WATCH: Michael Saylor on MicroStrategy and bitcoin