Derivative Financial Instruments

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Prior to the closing of the Transactions, as part of our compensation and employee retention strategy, we entered into contracts with key employees and independent contractors which contain embedded derivatives. These contracts are intended to compensate the employees or independent contractors for services provided and retain their future services. These embedded derivative instruments are issued in the form of phantom interests in Net Income, as defined by our board of directors, that grant the holder value equal to a percentage of Net Income multiplied by a price multiple, or contain an option that granted appreciation rights upon exercise, and which become exercisable upon occurrence of an initial public offering. All derivative instruments are recorded at fair value as derivative liabilities on our consolidated balance sheets.

As of September 30, 2021, there are both Private Placement Warrants and public warrants outstanding; each of which is exercisable for one share of Class A common stock of MarketWise, Inc. Additionally, there are embedded derivative instruments outstanding. The following table presents information on the location and amounts of derivative instruments gains and losses:


		Three Months Ended September 30,	Nine Months Ended September 30,
			2021		2020		2021		2020
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income Statement
Warrants	Other income, net		$	9,952	$	—	$	9,952	$	—
Phantom Interests in Net Income	Other income, net		—		(877)		—		(1,874)
Phantom Interests in Net Income	General and administrative		(250)		—		2,138		—
Option	General and administrative		115		—		(547)		—
Total			$	9,817	$	(877)	$	11,543	$	(1,874)

See Fair Value Measurements note for more information regarding the valuation of our derivative instruments.