Michael Saylor’s Strategy to join Wall Street elite with $14 billion windfall

And JPMorgan Chase & Co

Can attribute the eye-popping results to a rebound in the price of Bitcoin and a fairly recent accounting change when it comes to valuing its massive holdings of the cryptocurrency

Strategy is forecast to post only $112. 8 million in second-quarter revenue from the software, according to analysts surveyed by Bloomberg News

The ly record fit for the three months June 30 s a barrage of criticism from naysayers such as Jim Chanos

The renowned short-seller has an arbitrage trade to short the s of Strategy and buy Bitcoin, betting the large premium the stock commands over the value of its token holdings will shrink

The call has sparked a war of words that has captivated Wall Street, with Chanos calling Saylor’s model to value the crypto-treasury firm “financial gibberish” while Saylor argued that Chanos just does not understand it. “Saylor definitely has a right to feel vindicated,” said Mark Palmer, an analyst at Benchmark Capital, who has maintained a “buy” rating on Strategy since February 2024. “He’s had people criticizing him for more than four years now and his company has outperformed all other stocks and even the S&P by a long mile. ” Strategy’s s have soared over 3,300% since Saylor began buying Bitcoin in the middle of 2020 as a hedge against inflation

Strategy and fellow corporate buyers of Bitcoin are now recognizing the unrealized changes that often duce big swings in earnings

Prior to the accounting change, Strategy had been classifying its Bitcoin holdings similar to intangible assets patents or trademarks

That designation forced Strategy to permanently mark down the value of its holdings when the price of Bitcoin dropped below the previous carrying value

Gains could only be recognized when tokens were sold

The 30% appreciation in Bitcoin increased the market value of those holdings by over $13 billion alone, and the dozen weekly purchases since have tacked on over $600 million more to the unrealized gains, according to Bloomberg News calculations

Strategy is expected to release second-quarter results in August

A company representative didn’t reply to a request for

Even though the change in accounting was widely known, the first-quarter loss has triggered several class-action lawsuits alleging Strategy executives made untrue and misleading statements that resulted in harm to holders

Strategy said it int to “vigorously defend against these claims” in a recent filing with the U

Securities and Exchange Commission

Learn more all things crypto with short, easy-to-read lesson cards

Click here for Fortune's Crypto Crash Course.