Meta Should Consider Investing in Bitcoin to Avoid Devaluation of Cash and Cash Equivalents, Proposal Urges

The proposal urges Meta to replace some of its cash and bonds with BTC, but broader support is unlikely.

A recent shareholder proposal has urged Meta, the parent company of Facebook, to consider investing in Bitcoin.

The proposal highlights Bitcoin’s status as "the most inflation-resistant store of value available" and points to the cryptocurrency's strong one- and five-year performance.

According to the proposal, cash, cash equivalents, and marketable securities, such as bonds, comprise $72 billion of Meta's $256 billion assets.

The proposal argues that this $72 billion subtotal is "consistently diminishing shareholder value," and that Meta has a fiduciary duty to consider assets with higher appreciations, even if they are volatile.

The proposal suggests that by investing in Bitcoin, Meta could avoid the devaluation of cash and cash equivalents, as well as bond yields that fall below the inflation rate.

It concludes by urging Meta to consider the benefits of trading "even just a few percent" of its cash and bonds for Bitcoin.

The proposal also notes that members of Meta are already familiar with Bitcoin. It highlights that Marc Andreessen, a director at Meta, is also a director at the crypto exchange Coinbase and has shown support for Bitcoin.

Additionally, the proposal points out Meta CEO and chair Mark Zuckerberg's apparent interest in crypto, as he owns a pet goat named "Bitcoin." However, it remains unclear whether Zuckerberg personally invests in BTC or other cryptocurrencies.

"Do Meta shareholders not deserve the same kind of responsible asset allocation ... that Meta directors and executives likely implement for themselves?" the proposal states.

The document further notes other parties' involvement in Bitcoin, including MicroStrategy's aggressive Bitcoin purchases and the U.S. government's potential BTC strategic reserve. It also mentions BlackRock's launch of a spot Bitcoin ETF and its belief that a 2% Bitcoin allocation is reasonable.

The proposal appears to be a small-scale effort, with a single shareholder, Ethan Peck, submitting the proposal to Meta on behalf of his family shares.

Peck serves as deputy director at the National Center for Public Policy Research's Free Enterprise Project. Notably, the National Center, a conservative think tank, has also submitted similar proposals to Microsoft and Amazon in recent months.

While these proposals have garnered significant media attention, they don't seem to have gained traction among shareholders themselves. In December, Microsoft advised shareholders to vote against exploring a Bitcoin investment, and the shareholders ultimately rejected the proposal.

Since the latest proposals, Amazon and Meta have not yet provided any updates or held shareholder meetings. However, without any indication of broader support, each proposal seems to have a low chance of success.