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Investments | 9 Months Ended
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Sep. 30, 2017
Investments, All Other Investments [Abstract] |
Investments | INVESTMENTS The following table summarizes the Company's investments (dollars in thousands):
| September 30, 2017 |  | Percent Ownership of Voting Stock |  | December 31, 2016 |  | Percent Ownership of Voting Stock
Available-for-sale securities: |  |  |  |  |  |  |
Convertible debt securities | $ | 11,232 |  |  |  |  | $ | 10,038 |  |  |
Redeemable preferred shares | 15,552 |  |  | 19% | to | 25% |  | 17,444 |  |  | 19% | to | 25%
Total available-for-sale securities | 26,784 |  |  |  |  | 27,482 |  |  |
Cost method investments | 25,236 |  |  | 1% | to | 19% |  | 31,816 |  |  | 1% | to | 19%
Fair value option investments | 77,484 |  |  | 10% | to | 24% |  | 82,584 |  |  | 41% |  |
Total investments | $ | 129,504 |  |  |  |  | $ | 141,882 |  |  |
The following table summarizes the amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company's available-for-sale securities as of September 30, 2017 and December 31, 2016, respectively (in thousands):
| September 30, 2017 |  | December 31, 2016
| Amortized Cost |  | Gross Unrealized Gain |  | Gross Unrealized Loss (1) |  | Fair Value |  | Amortized Cost |  | Gross Unrealized Gain |  | Gross Unrealized Loss (1) |  | Fair Value
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Convertible debt securities | $ | 10,009 |  |  | $ | 1,333 |  |  | $ | (110 | ) |  | $ | 11,232 |  |  | $ | 8,453 |  |  | $ | 1,691 |  |  | $ | (106 | ) |  | $ | 10,038 |
Redeemable preferred shares | 18,375 |  |  | — |  |  | (2,823 | ) |  | 15,552 |  |  | 18,375 |  |  | — |  |  | (931 | ) |  | 17,444 |
Total available-for-sale securities | $ | 28,384 |  |  | $ | 1,333 |  |  | $ | (2,933 | ) |  | $ | 26,784 |  |  | $ | 26,828 |  |  | $ | 1,691 |  |  | $ | (1,037 | ) |  | $ | 27,482 |
(1) | As of September 30, 2017, one security in an unrealized loss position of $2.8 million has been in an unrealized loss position for greater than 12 months.
Fair Value Option Investments In connection with the dispositions of controlling stakes in Ticket Monster, an entity based in the Republic of Korea, in May 2015 and Groupon India in August 2015, the Company obtained minority investments in Monster Holdings LP ("Monster LP") and in GroupMax Pte Ltd. ("GroupMax," d/b/a "Nearbuy"), respectively. The Company has made an irrevocable election to account for both of these investments at fair value with changes in fair value reported in earnings. The Company elected to apply fair value accounting to these investments because it believes that fair value is the most relevant measurement attribute for these investments, as well as to reduce operational and accounting complexity. Monster LP In February 2017, the Company participated in a recapitalization transaction with Monster LP whereby it exchanged all 61,484,539 of its Class B units for 16,609,195 newly issued Class A-1 units. The Class B units previously held by the Company were then distributed from Monster LP to its controlling investor group and certain other existing unit holders. Upon closing of the transaction, the Company owns 57% of the outstanding Class A-1 units, which represents 9% of the total outstanding partnership units. Following the February 2017 recapitalization transaction, the Class A-1 units are entitled to a $150.0 million liquidation preference, including an $85.0 million liquidation preference attributable to the Class A-1 units held by the Company, which must be paid prior to any distributions to the holders of the Class A-2, Class B and Class C units. Class A-1 unit holders are also entitled to share in distributions between $950.0 million and $1,494.0 million in accordance with the terms of Monster LP's distribution waterfall and in distributions in excess of $1,494.0 million based on their pro rata ownership of total outstanding partnership units. As a result of the February 2017 recapitalization transaction, the Company currently holds an investment in the most senior equity units in Monster LP’s capital structure. However, while providing more downside protection, those Class A-1 units provide less opportunity for appreciation than the Class B units previously held by the Company. To determine the fair value of the Company’s investment in Monster LP each period, the first step was to estimate the fair value of Monster LP in its entirety. The Company primarily used the discounted cash flow method, which is an income approach, to estimate the fair value of Monster LP. The key inputs to determining fair value under that approach are cash flow forecasts and discount rates. As of September 30, 2017 and December 31, 2016, the Company applied a discount rate of 22% in its discounted cash flow valuation of Monster LP. The Company also used a market approach valuation technique, which is based on market multiples of guideline companies, to determine the fair value of Monster LP as of September 30, 2017 and December 31, 2016. The discounted cash flow and market multiple valuations were then evaluated and weighted to determine the amount that is most representative of the fair value of the investee. Once the Company determined the fair value of Monster LP, it then determined the fair value of its specific investment in that entity. Monster LP has a complex capital structure, so the Company applied an option-pricing model that considers the liquidation preferences of the investee’s respective classes of ownership interests to determine the fair value of the Company’s investment in the entity. Based on the above procedures, the Company determined that the fair value of its investment in Monster LP was $77.2 million and $78.7 million, respectively, as of September 30, 2017 and December 31, 2016. The Company recognized a loss of $3.8 million and a gain of $2.3 million for the three months ended September 30, 2017 and 2016, respectively, and a loss of $1.5 million and a gain of $0.9 million for the nine months ended September 30, 2017 and 2016, respectively, from changes in the fair value of its investment. GroupMax To determine the fair value of the Company’s investment in GroupMax each period, the Company applies the same methodology as described above for Monster LP. The Company determined that the fair value of its investment in GroupMax was $0.3 million and $3.9 million, respectively, as of September 30, 2017 and December 31, 2016. The Company recognized losses of $0.2 million and $3.9 million for the three months ended September 30, 2017 and 2016, respectively, and losses of $3.6 million and $8.2 million for the nine months ended September 30, 2017 and 2016, respectively, from changes in the fair value of its investment. Other Investments In July 2017, the Company sold a cost method investment for total consideration of $16.0 million, consisting of $14.7 million received in cash and $1.3 million that the acquirer paid into an escrow account that will be settled within 18 months of closing. The Company recognized a pretax gain on the disposition of $7.6 million, which is classified within "Other income (expense), net" on the consolidated statement of operations. In March 2017, the Company acquired a convertible debt instrument of a company that connects consumers with fitness, beauty and wellness businesses in Asia, as consideration for the sale of Groupon Singapore. The convertible debt instrument was recorded at its $1.6 million acquisition date fair value and is accounted for as an available-for-sale security. In March 2017, in connection with the disposition of Groupon Israel, the Company retained a minority investment in the entity. The investment was recorded at its $0.4 million fair value at initial recognition and is accounted for as a cost method investment.

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- Definition The entire disclosure for cost method and equity method investments included basis, impairment losses, recognized or unrecognized gains (losses). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 325 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2197087 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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