NETFLIX, INC. | Assessment of adding Bitcoin to the Company’s treasury at NETFLIX, INC.

Status
Omitted
AGM date
Resolution details
Company ticker
NFLX
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders request that the Board conduct an evaluation to determine whether incorporating Bitcoin into Netflix's balance sheet is in the long-term interests of shareholders.
Supporting statement
In periods of high and persistent inflation, a company's ability to preserve its financial health depends not only on operational success but also on its approach to asset management. Strategic investment in appreciating assets can significantly boost shareholder value beyond what is achievable through business operations alone. This responsibility suggests a fiduciary obligation for companies to both generate profits and safeguard them from potential loss in value. In the past four years, U.S. inflation has averaged 5.03%, peaking at 9.1% in June 2022 according to the Consumer Price Index (CPI). Critics, however, argue that CPI may underreport actual inflation, with some studies estimating the real rate to be nearly double at times. This implies that companies must grow their assets significantly each year just to maintain their purchasing power. As of March 31, 2024, Netflix has substantial assets, a large share of which is in U.S. government securities and corporate bonds. While these are traditionally stable investments, their returns are only marginally above reported inflation and may actually lag behind true inflation rates. Given these conditions, it may be prudent for companies to diversify their balance sheets with assets that offer higher potential returns than bonds, even if they come with greater short-term volatility. Bitcoin, for example, saw a 99.7% increase over the past year as of June 25, 2024, outperforming corporate bonds significantly. Over a five-year period, Bitcoin's price has risen 414%, establishing it as one of the most high-performing assets in recent times. Companies like MicroStrategy have added Bitcoin to their balance sheets, and their stock has outperformed that of many larger competitors, demonstrating the potential financial benefits of holding Bitcoin. Institutional adoption of Bitcoin has also increased, with companies like BlackRock introducing Bitcoin ETFs for clients, underscoring the asset's rising credibility. Bitcoin is a more volatile asset than traditional bonds; however, it has shown promise as an effective hedge against inflation. Holding a small allocation of Bitcoin could help protect shareholder value against inflation and enhance the company's overall asset diversification.

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