Meta Bitcoin: Shareholders Deliver Stunning Rejection to Treasury Plan

The world of corporate finance often intersects with the rapidly evolving digital asset space. A recent decision by one of the largest tech companies has sent a clear message regarding their current stance on cryptocurrency. Meta, the parent company of Facebook and Instagram, will not be adding Bitcoin to its balance sheet anytime soon, following a decisive shareholder vote.

Meta Shareholders Speak: A Resounding No

Meta shareholders recently cast their votes on a proposal that would have assessed the feasibility of adding Bitcoin to the company’s corporate treasury. The results were clear and heavily lopsided: the proposal received a mere 0.08% of the total votes in favor. Out of nearly 5 billion votes cast, only 3.92 million supported the idea, according to a regulatory filing on May 28.

This overwhelming rejection suggests a strong consensus among Meta’s ownership against exploring a Bitcoin treasury strategy at this time. Given that Meta CEO Mark Zuckerberg holds significant voting power (61%), his stance likely played a crucial role in the outcome.

The Argument for a Bitcoin Treasury

The proposal was initiated in January by Bitcoin advocate Ethan Peck, representing his family’s shares. Peck argued that investing a portion of Meta’s substantial cash reserves—reported at $72 billion in cash and cash equivalents—into Bitcoin (BTC) could serve as a hedge against inflation.

His supporting statement highlighted concerns about the diminishing value of cash due to debasement and bond yields not keeping pace with inflation. Peck contended that holding large amounts of cash was actively reducing shareholder value. He also referenced BlackRock, Meta’s second-largest shareholder, noting their suggestion that a 2% Bitcoin allocation could be reasonable for some portfolios.

Why the Shareholder Vote Went Against Bitcoin

Despite the arguments for Bitcoin as an inflation hedge, the vast majority of Meta shareholders were unconvinced. Several factors likely contributed to this decision:

• Volatility Concerns: Bitcoin is known for its price volatility. Many traditional investors and corporations remain hesitant to hold such a fluctuating asset on their balance sheet, fearing it could negatively impact earnings and stability.
• Opportunity Cost: Shareholders might prefer Meta to invest its considerable cash hoard into core business activities like research and development, acquisitions, or returning value through dividends or buybacks, rather than a speculative asset like Bitcoin.
• Regulatory Uncertainty: The regulatory landscape for cryptocurrencies is still evolving globally, which can be a deterrent for large, publicly traded companies.
• Focus on Core Business: Meta’s primary focus remains on its social media platforms, advertising business, and investments in the metaverse. A move into Bitcoin treasury management might be seen as a distraction from these core areas.

It’s worth noting that Ethan Peck has submitted similar Bitcoin treasury proposals to other tech giants like Microsoft and Amazon in the past. Microsoft shareholders also voted against his proposal in December. Amazon shareholders are reportedly still awaiting a vote on a similar measure.

Corporate Bitcoin Adoption Trend Continues Elsewhere

While Meta and Microsoft have said no for now, the trend of publicly traded companies adding Bitcoin to their balance sheets continues to grow. Data from BitcoinTreasures.NET indicates that 116 public companies globally now hold Bitcoin.

Recent additions include GameStop and Swedish health tech firm H100, both making their first BTC purchases last month. MicroStrategy, led by Michael Saylor, remains the leader in corporate Bitcoin holdings, with over 214,000 BTC as of late May, valued at billions of dollars. Other notable corporate holders include Marathon Digital Holdings and Tesla, each holding over $1 billion worth of Bitcoin.

This contrast highlights that while some companies embrace Bitcoin as a treasury asset, others, particularly large, established tech firms like Meta, remain cautious, prioritizing stability and traditional investment strategies over potential inflation hedges offered by volatile digital assets.

Summary: A Clear Stance, For Now

Meta’s recent shareholder vote sends a strong signal that the tech giant is not currently interested in exploring Bitcoin as a treasury asset. The overwhelming rejection underscores shareholder preference for traditional cash management and investment strategies over the potential benefits and risks associated with holding a volatile asset like Bitcoin. While the corporate Bitcoin adoption trend is undeniable globally, Meta’s decision illustrates that it’s not a universal path, especially for companies with vast cash reserves and a focus on established business models. The debate between traditional finance and digital asset integration within corporate treasuries is far from over, but for Meta, the answer is clear for the foreseeable future.