Interactive Brokers: MicroStrategy benefits from a self-fulfilling feedback loop

Odaily Odaily News: Interactive Brokers chief strategist Steve Sosnick pointed out last week that MicroStrategy's Michael Saylor's strategy of issuing convertible bonds and using the proceeds to buy Bitcoin is actually the definition of leveraged trading-borrowing money to buy financial assets. This method works very well when the price of an asset moves in a direction that is favorable to you, and Bitcoin performs quite well. But if it moves in the opposite direction, this method will collapse in a nasty way. Steve Sosnick emphasized that MicroStrategy benefits from a "self-fulfilling feedback loop." It buys more Bitcoin, helping to push up prices, and then sells more debt and stocks to buy more Bitcoin, further pushing up prices. But these kinds of things never last forever and often end badly-the question is when? The short-term answer seems to be that it's not yet time. (Business Insider)