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CONVERTIBLE NOTES | 12 Months Ended
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Dec. 31, 2023
CONVERTIBLE NOTES [Abstract] |
CONVERTIBLE NOTES |
13. | CONVERTIBLE NOTES
|  | As of December 31, |
|  | 2022 |  |  | 2023 |
|  | $ |  |  | $ |
2023 Convertible Notes |  |  | 31,237 |  |  |  | – |
2024 Convertible Notes |  |  | 151,459 |  |  |  | 151,764 |
2025 Convertible Notes |  |  | 1,144,794 |  |  |  | 1,146,369 |
2026 Convertible Notes |  |  | 2,042,497 |  |  |  | 1,803,416 |
|  |  | 3,369,987 |  |  |  | 3,101,549 |
The Company issued the following convertible notes and the terms are as follows:
|  | 2023 Convertible Notes | 2024 Convertible Notes | 2025 Convertible Notes | 2026 Convertible Notes
Issuance date |  | June 18, 2018 | November 18, 2019 | May 22, 2020 | September 14, 2021
Maturity date |  | July 1, 2023 | December 1, 2024 | December 1, 2025 | September 15, 2026
Principal amount |  | $575,000 | $1,150,000 | $1,150,000 | $2,875,000
Interest rate |  | 2.25% | 1.00% | 2.375% | 0.25%
Initial conversion rate |  | 50.5165 American Depositary Shares (“ADSs”) per $1 principal amount, equivalent to $19.80 per ADS | 19.9475 ADSs per $1 principal amount, equivalent to $50.13 per ADS | 11.0549 ADSs per $1 principal amount, equivalent to $90.46 per ADS | 2.0964 ADSs per $1 principal amount, equivalent to $477.01 per ADS
Agreed conversion date |  | January 1, 2023 | June 1, 2024 | September 1, 2025 | June 15, 2026
The Convertible Notes holders (the “Holders”) have the right, at their option, to convert the outstanding principal amount of the convertible notes, in whole or in part in integral multiples of $1 principal amount (i) upon satisfaction of one or more of the conversion conditions as defined in the indenture prior to the close of business day immediately preceding the agreed conversion date; or (ii) anytime on or after the agreed conversion date until the close of business on the second scheduled trading day immediately preceding the maturity date (the “Conversion Option”). The conversion is subject to the anti-dilution and make-whole fundamental change adjustments. Upon conversion, the Company has the right, at its option, to pay or deliver, either cash, ADSs, or a combination of cash and ADSs to the Holders. If certain events of default, changes in tax laws of the relevant taxing jurisdiction or fundamental change, optional redemption or clean up redemption as defined in the indenture were to occur, of which the optional redemption and clean up redemption only applies to the 2024 Convertible Notes, 2025 Convertible Notes and 2026 Convertible Notes, the outstanding obligations under the respective convertible notes could be immediately due and payable (the “Contingent Redemption Options”). The Company evaluated the Conversion Option and Contingent Redemption Options in accordance with ASC 815, Derivatives and Hedging, to determine if these features require bifurcation and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Conversion Option and Contingent Redemption Options were not required to be bifurcated in accordance with ASC 815 and the Convertible Notes were accounted for as a single liability measured at amortized cost. The following table presents the carrying amount of the Convertible Notes:
|  | As of December 31, 2022 |  |  | As of December 31, 2023 |
|  | 2023 Convertible Notes |  |  | 2024 Convertible Notes |  |  | 2025 Convertible Notes |  |  | 2026 Convertible Notes |  |  | Total |  |  | 2024 Convertible Notes |  |  | 2025 Convertible Notes |  |  | 2026 Convertible Notes |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
Principal |  |  | 31,300 |  |  |  | 152,048 |  |  |  | 1,149,500 |  |  |  | 2,057,784 |  |  |  | 3,390,632 |  |  |  | 152,048 |  |  |  | 1,149,500 |  |  |  | 1,813,273 |  |  |  | 3,114,821 |
Less: unamortized issuance cost and debt discount |  |  | (63 | ) |  |  | (589 | ) |  |  | (4,706 | ) |  |  | (15,287 | ) |  |  | (20,645 | ) |  |  | (284 | ) |  |  | (3,131 | ) |  |  | (9,857 | ) |  |  | (13,272 | )
Net carrying amount |  |  | 31,237 |  |  |  | 151,459 |  |  |  | 1,144,794 |  |  |  | 2,042,497 |  |  |  | 3,369,987 |  |  |  | 151,764 |  |  |  | 1,146,369 |  |  |  | 1,803,416 |  |  |  | 3,101,549 |
During the years ended December 31, 2021, 2022 and 2023, the Company recognized total interest expense for coupon interest of $36,191, $36,544 and $34,309, respectively, and amortization of discount and debt issuance costs on the liability component amounted to $100,141, $7,536 and $6,034, respectively. As a result of the adoption of ASU 2020-06, remaining discount on liability component had been derecognized and therefore amortization of discount on the liability component is no longer recognized. As of December 31, 2022, the if-converted value of 2023 and 2024 Convertible Notes exceeded the principal amount by $50,968 and $5,758, respectively. As of December 31, 2023, the if-converted value of the Convertible Notes did not exceed the principal amount. Capped call transactions In connection with the offering of 2024 Convertible Notes and 2025 Convertible Notes, the Company entered into separately negotiated capped call transactions with certain counterparties (collectively, the “Capped Calls”). The details of the Capped Calls are as follows:
|  | 2024 Convertible Notes |  |  | 2025 Convertible Notes |
Initial strike price per share |  | $ | 50.13 |  |  | $ | 90.46 |
Initial cap price per share |  | $ | 70.36 |  |  | $ | 136.54 |
The Capped Calls are generally intended to reduce or offset the potential economic dilution to the Class A ordinary shares upon any conversion of the 2024 Convertible Notes and 2025 Convertible Notes, respectively, with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Calls are considered indexed to the Company’s own stock and are equity classified, they are recorded in shareholders’ equity and are not accounted for as derivative. The costs of $97,060 and $135,700 incurred in connection with the Capped Calls of the 2024 Convertible Notes and 2025 Convertible Notes, respectively, were recorded as reductions to additional paid-in capital. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be anti-dilutive under treasury stock method. Repurchase of convertible notes Subsequent to December 31, 2023, the Company repurchased 2026 Convertible Notes of $171,893, and recorded a $27,112 gain on debt extinguishment.

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- Definition The entire disclosure of borrowings which can be exchanged for a specified number of another security at the option of the issuer or the holder. Disclosures include, but are not limited to, principal amount, amortized premium or discount, and amount of liability and equity components. + References No definition available. + Details
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- References No definition available. + Details
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