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- A group of Amazon shareholders have submitted a proposal to the company to consider allocating a portion of its assets to Bitcoin.
- Their reason is strongly based on the rising inflation rate in the US and the lower yield of bonds that make it difficult to break even.
The National Center for Public Policy Research (NCPPR) has, on behalf of a section of shareholders, submitted a proposal to Amazon for consideration at the 2025 annual shareholder meeting to allocate at least 5% of its assets into Bitcoin (BTC).
According to the letter shared by a Bitcoin Podcast host Tim Kotzman, this suggestion is meant to mitigate the impact of the rising inflation while maximizing the value of shareholders. In our analysis of the proposal, the letter highlighted the impact of consistent inflation on the company’s value. It also stressed the need to protect the profits of a business from such negative factors.
The National Center for Public Policy Research has submitted the attached shareholder proposal to https://t.co/Lve7Kg1nVI, Inc. for consideration at the 2025 annual shareholder meeting.
Shareholders request that the Board assess adding #Bitcoin to the Company’s Treasury pic.twitter.com/lsgHC0aGrt— Tim Kotzman (@TimKotzman) December 8, 2024
Reasons for this Proposal
Referencing the CPI, the shareholders pointed out that the average inflation rate in the US over the last four years is 4.95%. In June 2022, the inflation peaked at 9.1%. However, they argued in the letter that the true inflation rate is significantly higher. According to them, some studies have confirmed that the rate sometimes doubles the CPI data. In this case, corporation assets need to be appreciating accordingly to break even.
Aligning this inflationary data to the assets of Amazon, the letter highlighted that the company had $585 billion in total assets as of September 30, 2024. Out of this, $80 billion was in cash, cash equivalent, and marketable securities. This includes foreign government bonds, US bonds, and corporate bonds.
Per their argument, cash is consistently being debased while bonds are yielding lower than the US inflation rate. By just holding the assets, Amazon is failing to protect the shareholders’ value worth billions of dollars. Per their suggestion, the company should add an asset that appreciates more than bonds to its treasury.
Bitcoin vs. Corporate Bond
Backing their argument with Bitcoin’s price performance, it was stated that the digital asset has increased by 131% over the previous year compared to corporate bonds, which, on average, managed 126% within the same period. In the longer time frame, Bitcoin has increased by 1246% in the last five years. Within the same period, corporate bonds have recorded a 1242% surge on average.
In concluding the letter, the shareholders highlighted corporations’ responsibility to maximize shareholders’ value over the long and short term. They also cited MicroStrategy’s stock outperforming Amazon’s by 537% in the previous year. Additionally, the bold decisions of Tesla and Block to add Bitcoin to their balance sheets were highlighted.
MicroStrategy, which holds Bitcoin on its balance sheet, has had its stock outperform Amazon stock by 537% in the previous year. And they’re not alone. Institutional and corporate Bitcoin adoption is becoming more commonplace: more public companies such as Tesla and Block have added Bitcoin to their balance sheets, Amazon’s second and fourth largest institutional shareholders—BlackRock and Fidelity, respectively—offer their clients a Bitcoin ETF, and the US government may form a Bitcoin strategic reserve in 2025.
At press time, Bitcoin was trading at $99.6k after surging by 30% in the last 30 days.
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