McDonald’s to Hold Shareholders Meeting Next Month
Recently, the company’s shareholder, the National Center for Public Policy Research, proposed acquiring Bitcoin as a reserve asset, but this proposal does not seem to be accepted by the company’s management.
(Background: MicroStrategy adds $580 million to purchase nearly 7,000 BTC, pushing its holdings past 500,000 Bitcoin, with Strategy soaring 10%)
(Context: GameStop follows MicroStrategy in buying Bitcoin! Plans to issue $1.3 billion in convertible bonds, stock price plummets 22%)
Shareholders Propose Bitcoin Inclusion in McDonald’s Asset Portfolio
The global fast-food giant McDonald’s shareholders, the American conservative think tank National Center for Public Policy Research, recently submitted a proposal suggesting that McDonald’s consider adding Bitcoin to its balance sheet, similar to some technology companies, and hopes to discuss this at the annual shareholders meeting scheduled for May.
The conservative think tank advises: Real estate’s long-term potential pales in comparison to Bitcoin.
In its proposal letter, the National Center for Public Policy Research articulated its viewpoint, citing the famous statement by McDonald’s former CFO and President Harry Sonneborn, stating, “McDonald’s is widely regarded as a real estate company that happens to sell hamburgers.” The think tank believes that while real estate has long been seen as a more reliable store of value than cash and bonds, its long-term appreciation potential is far less than that of Bitcoin, and its liquidity is also inferior.
The proposal further warns:
“As more companies add Bitcoin to their balance sheets, if McDonald’s does not follow suit, it will fall behind in its once-leading field.”
McDonald’s Takes a Reserved Approach; SEC Agrees Not to Discuss
However, McDonald’s legal representatives appear to have a reserved attitude toward this proposal. They recently wrote to the U.S. Securities and Exchange Commission (SEC), seeking confirmation from the regulatory body that if the company decides not to publicly discuss the Bitcoin purchase proposal at the upcoming shareholders meeting, the SEC’s Division of Corporation Finance will not take any enforcement action.
It is understood that the SEC clearly responded at the end of last month, stating that they agree McDonald’s has the right to exclude the proposal from its annual shareholders meeting agenda. When explaining its stance, the SEC noted, “We believe that this proposal pertains to the company’s ordinary business operations.” Based on this perspective, the SEC stated:
“Therefore, if the company relies on this reasoning to omit the proposal from its proxy materials, we would not recommend that the Commission take enforcement action.”
In simple terms, the SEC believes that decisions regarding specific investments or asset allocations (such as whether to buy Bitcoin) are categorized as part of management’s daily operations and not significant matters that require shareholder votes. In other words, McDonald’s management may not propose a discussion on whether to purchase Bitcoin next month…
The Wave of Corporations Embracing Bitcoin
It is known that shareholders requesting companies to purchase Bitcoin is not a new phenomenon. Since Michael Saylor, founder of MicroStrategy, began acquiring and holding Bitcoin as a core strategy for the company, “Bitcoin reserves” have become an appealing trend, significantly boosting the company’s stock price.
Recently, we have also heard news of new companies purchasing Bitcoin as corporate reserves; however, not all companies are eager to follow this trend. At a shareholders meeting held by technology giant Microsoft last year, a shareholder proposed allocating 1% of the company’s total assets for investment in Bitcoin, but after a preliminary vote by the Microsoft board, the proposal was ultimately rejected.
As cryptocurrencies become increasingly mainstream, whether and how to incorporate digital assets into corporate financial strategies will undoubtedly be a pressing issue that major global companies need to consider carefully. McDonald’s response to this situation and the SEC’s ruling also provide important reference cases for other companies facing similar situations.
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