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FAIR VALUE MEASUREMENTS | 9 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: •Level 1 - observable inputs, such as quoted prices in active markets for identical assets or liabilities; •Level 2 - significant other inputs that are observable either directly or indirectly; and •Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value. The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation model uses various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield. The Company applies judgment when determining expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security. The Company’s venture investments are recorded at fair value based on multiple valuation methods, including observable public companies and transaction prices and unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. Assets and liabilities measured at fair value on a recurring basis:
| September 30, 2022 |  | December 31, 2021
(in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash equivalents | $ | 20,899 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,899 |  |  | $ | 3,216 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,216 |
Marketable securities | $ | — |  |  | $ | 168,085 |  |  | $ | — |  |  | $ | 168,085 |  |  | $ | — |  |  | $ | 202,814 |  |  | $ | — |  |  | $ | 202,814 |
Capped Call Transactions (1) | $ | — |  |  | $ | 3,583 |  |  | $ | — |  |  | $ | 3,583 |  |  | $ | — |  |  | $ | 59,964 |  |  | $ | — |  |  | $ | 59,964 |
Venture investments (1) (2) | $ | — |  |  | $ | — |  |  | $ | 11,910 |  |  | $ | 11,910 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,648 |  |  | $ | 7,648 |
(1) Included in other long-term assets. (2) Investments in privately-held companies. Changes in venture investments:
| Nine Months Ended September 30,
(in thousands) | 2022 |  | 2021
January 1, | $ | 7,648 |  |  | $ | 8,345 |
New investments | 400 |  |  | 500 |
Sales of investments | (3,954) |  |  | (400) |
Changes in foreign exchange rates | (675) |  |  | (52) |
Changes in fair value: |  |  |
included in other income | 5,989 |  |  | 100 |
included in other comprehensive income | 2,502 |  |  | 1,220 |
September 30, | $ | 11,910 |  |  | $ | 9,713 |
The carrying value of certain other financial instruments, including receivables and accounts payable, approximates fair value due to these items’ short maturities. Fair value of the Notes The Notes’ fair value (including the conversion feature embedded in the Notes) was $488.3 million as of September 30, 2022 and $642.0 million as of December 31, 2021. The fair value was determined based on the Notes’ quoted price in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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