In a bold pitch that has Polymarket bettors buzzing, Microstrategy executive chairman Michael Saylor recently urged Microsoft to add Bitcoin to its balance sheet. Saylor, whose software company has seen its stock surge over 450% this year after converting much of its treasury to Bitcoin, argued the cryptocurrency could act as a hedge against inflation and economic uncertainty for the tech giant. However, Polymarket traders are giving the proposal slim odds, with the “Yes” shares trading at just $0.11, indicating only an 11% chance shareholders will approve the motion at Microsoft’s December 10th meeting.
Saylor: Microsoft Is Weakening Itself By “Surrendering” Cash
In his pitch to Microsoft’s board, Saylor contended the company’s current treasury strategy of paying dividends and buying back stock is undermining its competitive position. He noted Microsoft has “surrendered” $200 billion in capital over the past five years through these tactics, cash he believes could have been far more productively invested in Bitcoin. Powered by its Bitcoin holdings, Microstrategy’s stock is up over 1,200% during that period.
Microsoft’s capital return policy weakens its shareholders’ position and strengthens their competitors… Microsoft ought to own Bitcoin to defend their treasury, shareholders, products, employees, and customers.
– Michael Saylor
Saylor calculates that if Microsoft had started accumulating Bitcoin five years ago instead of losing billions on buybacks, the company’s $3.2 trillion market capitalization could now exceed $8 trillion, vaulting it far ahead of Apple as the world’s most valuable company.
Bitcoin Exposure Already Easy for Investors to Get
Despite Saylor’s enthusiastic projections, most Polymarket bettors don’t expect his vision to sway Microsoft’s historically conservative shareholder base. Trader “Oxymirin,” who holds a $2,000 position on the “No” side of the bet, argued there’s no real incentive for institutions to want Bitcoin exposure through Microsoft stock.
There are already so many options out there to get Bitcoin exposure – which wasn’t the case when Microstrategy originally bought. They’re just making their value assessment more difficult by muddying up safe investments (MSFT) with volatile ones (BTC).
– Oxymirin, Polymarket trader
Indeed, the recent proliferation of Bitcoin ETFs, futures, and other regulated investment vehicles makes it easier than ever for both retail and institutional investors to gain direct exposure to the cryptocurrency without taking on single-stock risk. Even among corporations that are bullish on Bitcoin, most have opted to keep it off their balance sheets and offer it only through add-on services and partnerships.
Baby Steps for Bitcoin Possible, But Uphill Battle
With Microsoft sitting on a sizable cash hoard and enjoying strong and stable free cash flows, some Polymarket bulls believe the company could allocate a small portion of its treasury to Bitcoin as a trial run without ruffling too many shareholder feathers. Bettor “titanlin,” who is long Yes shares, expects a symbolic allocation to test the waters.
I think a small amount of funds will be allocated for testing. After all, shareholders’ rights must be taken into consideration. Microsoft’s cash position is sufficient. Microsoft offers some options for buying Bitcoin.
– titanlin, Polymarket trader
Still, getting any Bitcoin buy-in from the Microsoft board and shareholders seems like a long shot in the current macro environment. With regulatory uncertainty around crypto rising and contagion from the FTX collapse still playing out, most Wall Street analysts expect the board to stick to its prior opposition to any Bitcoin allocation. In October, Microsoft recommended investors reject a Bitcoin diversity proposal, cautioning the cryptocurrency lacked the stability needed for a company of Microsoft’s scale. Changing course and supporting Saylor’s much more aggressive plan would represent a drastic policy reversal.
While Bitcoin believers can hold out hope for a surprise at Microsoft’s upcoming shareholder gathering, the Polymarket odds suggest Saylor still has a lot more preaching and persuading to do to get his Bitcoin gospel to spread through corporate boardrooms.
