Meta Shareholder Requests Board to Consider Bitcoin Treasury
A Meta shareholder has submitted a proposal urging the company to assess the potential benefits of incorporating Bitcoin into its treasury. The proposal highlights Bitcoin’s historical growth and its potential as an inflation-resistant asset compared to traditional cash and bonds.
Meta Shareholder Board to Consider Bitcoin Treasury?
As per the proposal, by the end of the year 2024, that is, by December 30, the price of Bitcoin had increased by 124% in a year which was even better than the average performance of bonds.
In the last five years, the price of Bitcoin has risen by 1,265%, while bonds have been a distant second with an average return difference of 1,245%. Amid this announcement, Bitcoin price has seen a recovery with the price swaying between an intra-day high and low of $95,770 and $92,250, respectively.
The submission also points out that cash and cash equivalents (which account for $72 billion out of $256 billion of Meta’s total assets as of September 30, 2024) are vulnerable to depreciation owing to inflation. It posits that integrating a part of these cash reserves with Bitcoin may be a way of preserving shareholder value even with the known volatility of Bitcoin.
Bitcoin Adoption Among Corporations and Institutions
The proposal emphasizes the transition of Bitcoin from an investment or a payment method to a treasury asset for companies and institutions. MicroStrategy, a business that acquired Bitcoin early on, claimed that its equity rose by 17,000% through using BTC in its balance sheeting strategy. Likewise, Square (now Block) was 2.5 times better than the Nasdaq index and 12 times better than Meta’s performance.
Moreover, BlackRock, the second biggest Meta’s institutional investor, has introduced a Bitcoin ETF that turned into the most popular ETF in history. BlackRock has also come out in public stating that 2% of investment in Bitcoin is a good approach towards investing for the future.
The Meta shareholder’s proposal is that an allocation of this kind for Meta’s treasury could demonstrate progressive financial stewardship and be consistent with other leading companies.
Support from Meta Leadership and Industry Trends
According to the proposal, Meta’s leadership and its stakeholders have displayed interest in Bitcoin and its ecosystem. Meta’s founder, Mark Zuckerberg, and its board member Marc Andreessen who is also a member of Coinbase’s board has previously supported blockchain and cryptocurrencies.
The shareholder argues that Meta shareholders should receive treasury management strategies that are similar to the sophisticated financial management strategies that most probably, some of Meta’s directors and executives have used.
The submission also mentions several companies and governments considering Bitcoin or already implementing it in the treasuries. For example, a bill was recently submitted to the New Hampshire legislature, which provides for the ability of the state treasury to hold Bitcoin as a reserve asset together with precious metals such as gold and silver.
In the same way, public firms such as Heritage Distilling Holding Company and Genius Group Ltd have also embraced Bitcoin where Genius Group Ltd for instance purchased $5 million worth of bitcoins as part of its Bitcoin-first strategy.
Request for Assessment and Fiduciary Duty
The proposal calls on Meta’s board to perform an assessment to find out if it would be in the best interest of shareholders to include Bitcoin in Meta’s reserve. Thus, it postulates that as a fiduciary duty, the board should consider investments that can yield a return higher than cash and bonds, even if these investments are associated with higher risks.
Meta has always been known as a technology leader and a pioneer of new approaches to business. The Meta shareholder argues that this will strengthen this reputation by making Meta as one fo the first corporations to embrace Bitcoin. The request is more of a proposition but does not require a particular action, which focuses on the need to evaluate the possibility of using Bitcoin as a strategic asset.
Concurrently, John Deaton, a pro crypto lawyer has pointed out that Microsoft shareholders recently rejected the idea of investing in Bitcoin after a similar motion was made. Deaton further explained that Meta shareholders might find themselves in a similar situation but pointed out that companies that are waiting for future legislation that supports Bitcoin adoption such as the State Bitcoin Reserve (SBR) provisions in the Lummis Bill might view BTC as an acquisition of strategic importance.
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