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EQUITY INVESTMENTS
12 Months Ended
Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY INVESTMENTS EQUITY INVESTMENTS
On February 28, 2020, the Company acquired an equity interest in Stash Financial, Inc. (“Stash”) for $80.0 million. On January 6, 2021, the Company acquired an additional equity interest for $1.2 million. Stash is a consumer investing and banking platform. Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.
On October 18, 2021, the Company entered into a stock transfer agreement with third parties to sell a portion of its Stash equity securities for $46.3 million with a cost basis of $18.4 million. The Company recorded a realized gain of $27.9 million based on the sale of Stash equity securities under the stock transfer agreement. In 2021, the Company recorded a net unrealized gain on the investment in Stash of $95.4 million as a result of an adjustment to the fair value of the Stash equity securities based on observable market events.
In the third quarter of 2023, the Company determined there was an impairment indicator related to its Stash investment and performed a valuation of the investment. Based on the valuation, the Company determined the estimated fair value was below
the carrying value of the investment and recorded an impairment charge of $113.1 million. The Company determined the fair value by using a market approach and a DCF analysis. Determining the fair value using a DCF analysis and a market analysis requires the exercise of significant judgments, including judgments about the appropriate discount rate, perpetual growth rates, including short-term revenue and EBITDA, the amount and timing of expected future cash flows, and the revenue exit multiple.
In the third quarter of 2024, the Company was informed that Stash executed a term sheet for additional funding. As a result, the Company determined there was an impairment indicator related to its Stash investment and performed a valuation of the investment. The Company determined the fair value by predominately modeling its value of the investment based on the new funding terms utilizing an option pricing model. Based on the valuation of the Stash investment, the Company determined the estimated fair value was below the carrying value of the investment and recorded an impairment charge of $43.4 million. Determining the fair value using the new funding terms requires the exercise of significant judgments, including judgments about the appropriate volatility, risk-free rate of return, time to expiration and liquidation preferences.
As of December 31, 2024, the carrying value of the Company’s investment in Stash was $1.7 million.
In January 2022, the Company acquired an equity interest in EarnUp Inc. (“EarnUp”) for $15.0 million. EarnUp is a consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being.
In the third quarter of 2024, the Company determined there was an impairment indicator related to its EarnUp investment and recorded an impairment charge of $15.0 million.
In the second quarter of 2023, the Company recorded an impairment charge of $1.4 million on one of its investment in equity securities.
These impairments are included within other income on the consolidated statement of operations and comprehensive income. As of December 31, 2022, there had been no impairments to the acquisition cost of the equity securities.