Strategic Investments

6 Months Ended

Jun. 30, 2023

Strategic Investments

Strategic Investments

Note 6 - Strategic Investments

Strategic investments include investments in a number of non-public technology-driven companies. We account for strategic investments under the ASC 321 measurement alternative for equity securities without readily determinable fair values, as there are no quoted market prices for the investments. The investments are measured at cost less impairment, adjusted for observable price changes and are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

In conjunction with certain of our strategic investments, we have the ability to commit additional capital over time through warrants and call options; for some investments, the exercisability and exercise prices are conditional on the achievement of certain performance metrics.

The following tables provide a roll-forward of the balance of strategic investments (in thousands):

	Three Months Ended June 30, 2023								Three Months Ended June 30, 2022
	Strategic investments		Warrants			Call options	Total		Strategic investments		Warrants			Call options		Total
Balance, beginning of period	$	277,676	$	1,654	$	17,233	$	296,563	$	123,168	$	31,284		—	$	154,452
Investments		10,917		—		—		10,917		44,660		—		16,340		61,000
Fair value adjustments:
Unrealized gains		—		—		—		—		—		—		—		—
Unrealized losses and impairments		(72,648)		(1,195)		—		(73,843)		(391)		—		—		(391)
Exercises		—		—		—		—		96,719		(30,089)		—		66,630
Balance, end of period	$	215,945	$	459	$	17,233	$	233,637	$	264,156	$	1,195	$	16,340	$	281,691

	Six Months Ended June 30, 2023								Six Months Ended June 30, 2022
	Strategic investments		Warrants			Call options	Total		Strategic investments		Warrants			Call options		Total
Balance, beginning of period	$	277,676	$	1,654	$	17,233	$	296,563	$	80,775	$	2,745		—	$	83,520
Investments		10,917		—		—		10,917		45,160		—		16,340		61,500
Fair value adjustments:
Unrealized gains		—		—		—		—		41,893		28,539		—		70,432
Unrealized losses and impairments		(72,648)		(1,195)		—		(73,843)		(391)		—		—		(391)
Exercises		—		—		—		—		96,719		(30,089)		—		66,630
Balance, end of period	$	215,945	$	459	$	17,233	$	233,637	$	264,156	$	1,195	$	16,340	$	281,691

	Inception to date
	Strategic investments		Warrants			Call options	Total
Investments	$	120,399	$	3,047	$	17,233	$	140,679
Fair value adjustments:
Realized gains		12,312		—		—		12,312
Unrealized gains		74,817		29,073		—		103,890
Unrealized losses and impairments		(73,756)		(1,572)		—		(75,328)
Exercises		96,719		(30,089)		—		66,630
Sales		(14,546)		—		—		(14,546)
Balance, end of period	$	215,945	$	459	$	17,233	$	233,637

In accordance with ASC 321-10-35-3, we determined an impairment indicator existed for one of our strategic investments as of June 30, 2023. Thus, we performed a quantitative analysis and concluded the fair value was less than the carrying value. An unrealized impairment loss of $73.8 million related to our strategic investment and related warrants was recorded in interest and other income (loss), net on our condensed consolidated statement of operations during the three months ended June 30, 2023.