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INVESTMENTS AND FAIR VALUE MEASUREMENTS | 6 Months Ended
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Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
INVESTMENTS AND FAIR VALUE MEASUREMENTS | INVESTMENTS AND FAIR VALUE MEASUREMENTS Marketable Securities We invest surplus funds in excess of operational requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns, maintaining a high degree of liquidity, and seeking to avoid the permanent impairment of principal. Our investments in marketable debt securities are classified and accounted for as available-for-sale. The marketable debt securities are classified either short-term or long-term based on each instrument’s underlying contractual maturity date. As of June 30, 2022 and December 31, 2021, we reported $17.1 million and $7.3 million of investments in debt securities as Marketable debt securities on our Condensed Consolidated Balance Sheets, respectively, as management intends to hold these investment for more than 12 months from the reporting date. We may sell certain marketable debt securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation. Our investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The marketable equity securities are measured at fair value with gains and losses recognized in Interest and other income (loss), net on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis in the investment. Marketable securities as of June 30, 2022 and December 31, 2021 consisted of following (in thousands):
| June 30, 2022
| Cost or Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
Mutual funds | $ | 40,297 |  |  | $ | — |  |  | $ | (2,990) |  |  | $ | 37,307 |
Corporate bonds | 17,670 |  |  | — |  |  | (523) |  |  | 17,147 |
Equity securities | 45,633 |  |  | 1,335 |  |  | (4,799) |  |  | 42,169 |
| $ | 103,600 |  |  | $ | 1,335 |  |  | $ | (8,312) |  |  | $ | 96,623 |
| December 31, 2021
| Cost or Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
Mutual funds | $ | 50,000 |  |  | $ | — |  |  | $ | (338) |  |  | $ | 49,662 |
Corporate bonds | 6,996 |  |  | 290 |  |  | — |  |  | 7,286 |
Equity securities | 38,100 |  |  | — |  |  | (1,331) |  |  | 36,769 |
| $ | 95,096 |  |  | $ | 290 |  |  | $ | (1,669) |  |  | $ | 93,717 |
As of June 30, 2022 and December 31, 2021, marketable securities are classified and reported on our Condensed Consolidated Balance Sheets as follows (in thousands):
|  | June 30, 2022
|  | Marketable Equity Securities |  | Marketable Debt Securities |  | Total
Mutual funds |  | $ | 37,307 |  |  | $ | — |  |  | $ | 37,307 |
Equity securities |  | 42,169 |  |  | — |  |  | 42,169 |
Corporate bonds |  | — |  |  | 17,147 |  |  | 17,147 |
|  | $ | 79,476 |  |  | $ | 17,147 |  |  | $ | 96,623 |
| December 31, 2021
| Marketable Equity Securities |  | Marketable Debt Securities |  | Total
Mutual funds | $ | 49,662 |  |  | $ | — |  |  | $ | 49,662 |
Equity securities | 36,769 |  |  | — |  |  | 36,769 |
Corporate bonds | — |  |  | 7,286 |  |  | 7,286 |
| $ | 86,431 |  |  | $ | 7,286 |  |  | $ | 93,717 |
The amortized costs and fair value of our marketable debt securities, by contractual maturity, as of June 30, 2022 (in thousands) are as follows:
| June 30, 2022
| Amortized Cost |  | Fair Value
Less than 1 year | $ | — |  |  | $ | — |
1 to 5 years | 9,158 |  |  | 9,217 |
More than 5 years | 8,512 |  |  | 7,930 |
Total | $ | 17,670 |  |  | $ | 17,147 |
Derivative Financial Instruments We invest in derivatives that are not designated as hedging instruments and which consist of call and put options. When we sell call and put options, the premium received is reported as Other current liabilities on our Condensed Consolidated Balance Sheets. When we purchase put or call options, the premium paid is reported as Other current liabilities on our Condensed Consolidated Balance Sheets. The carrying value of these options are adjusted to the fair value at the end of each reporting period until the options expire. Gains and losses recognized from the periodic adjustments to fair value are recognized as Interest and other income, on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Our derivative instruments which consisted of call and put options sold at their fair value as of the balance sheet date. These derivative instruments are reported as Other current liabilities on our Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (in thousands):
| June 30, 2022
| Cost |  | Unrealized Losses |  | Fair Value
Derivative instruments | $ | 4,863 |  |  | $ | 4,501 |  |  | $ | 9,364 |
| $ | 4,863 |  |  | $ | 4,501 |  |  | $ | 9,364 |
| December 31, 2021
| Cost |  | Unrealized Gains |  | Fair Value
Derivative instruments | $ | 6,370 |  |  | $ | (103) |  |  | $ | 6,267 |
| $ | 6,370 |  |  | $ | (103) |  |  | $ | 6,267 |
A summary of realized and unrealized gains and losses from our equity securities and derivative instruments are as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net unrealized losses recognized on marketable equity securities | $ | (6,923) |  |  | $ | — |  |  | $ | (4,784) |  |  | $ | — |
Net realized gains (losses) recognized on marketable equity securities | (254) |  |  | — |  |  | 772 |  |  | — |
Net unrealized losses recognized on derivative instruments | (1,943) |  |  | — |  |  | (4,603) |  |  | — |
Net realized gains recognized on derivative instruments | 2,009 |  |  | — |  |  | 1,875 |  |  | — |
Net realized gains recognized on marketable debt securities | — |  |  | — |  |  | 368 |  |  | — |
Total net losses recognized in interest and other income (loss), net | $ | (7,111) |  |  | $ | — |  |  | $ | (6,372) |  |  | $ | — |
Fair Value Measurements Our financial instruments measured at fair value on a recurring basis consisted of money-market funds, mutual funds, equity securities, corporate debt securities and derivatives. Equity securities are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. Corporate debt securities and derivative instruments are valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy. Financial instruments valued based on unobservable inputs which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 of the fair value hierarchy. We did not hold Level 3 financial instruments as of June 30, 2022 and December 31, 2021. Financial instruments measured at fair value on a recurring basis as of June 30, 2022 and December 2021 are classified based on the valuation technique in the table below (in thousands):
| June 30, 2022 |  |
| Fair Value Measurements Using |  |
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Assets: |  |  |  |  |  |  |
Mutual funds | $ | 37,307 |  |  | $ | — |  |  | $ | — |  |  | $ | 37,307 |
Equity securities | 42,169 |  |  | — |  |  | — |  |  | 42,169 |
Corporate bonds | — |  |  | 17,147 |  |  | — |  |  | 17,147 |
Total assets at fair value | $ | 79,476 |  |  | $ | 17,147 |  |  | $ | — |  |  | $ | 96,623 |
Liabilities |  |  |  |  |  |  |
Derivative instruments | $ | — |  |  | $ | 9,364 |  |  | $ | — |  |  | $ | 9,364 |
Total liabilities at fair value | $ | — |  |  | $ | 9,364 |  |  | $ | — |  |  | $ | 9,364 |
| December 31, 2021 |  |
| Fair Value Measurements Using |  |
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Assets: |  |  |  |  |  |  |
Mutual funds | $ | 49,662 |  |  | $ | — |  |  | $ | — |  |  | 49,662 |
Equity securities | 36,769 |  |  | — |  |  | — |  |  | 36,769 |
Corporate bonds | — |  |  | 7,286 |  |  | — |  |  | 7,286 |
Total assets at fair value | $ | 86,431 |  |  | $ | 7,286 |  |  | $ | — |  |  | $ | 93,717 |
Liabilities |  |  |  |  |  |  |
Derivative instruments | $ | — |  |  | $ | 6,267 |  |  | $ | — |  |  | $ | 6,267 |
Total liabilities at fair value | $ | — |  |  | $ | 6,267 |  |  | $ | — |  |  | $ | 6,267 |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI https://asc.fasb.org/topic&trid=2155941 + Details
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