Investments

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments consist of equity and debt securities.

Investment in equity securities

Following the Separation, the Company retained shares of publicly traded common stock of Consensus. As of December 31, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares, respectively, of the common stock of Consensus. As of December 31, 2023 and December 31, 2022, the carrying value of the investment in Consensus was $27.1 million and $58.4 million, respectively, and is included in ‘Short-term investments’ on the Consolidated Balance Sheets. The Company accounts for its investment in Consensus at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings.

During the year ended December 31, 2022, the Company completed the non-cash tax-free debt-for-equity exchanges of 2,800,000 shares of its common stock of Consensus for the extinguishment of $112.3 million of principal of the Company’s Term Loan Facilities (as defined in Note 10 — Debt), and related interest. During the years ended December 31, 2023 and December 31, 2022, the Company sold 52,393 shares and 73,919 shares, respectively, of common stock of Consensus in the open market.

Losses on equity securities recorded in ‘Unrealized (loss) gain on short-term investments held at the reporting date, net’ in the Consolidated Statements of Operations consisted of the following (in thousands):


	Year ended December 31,
	2023		2022
Net losses during the period	$	(28,138)	$	(53,888)
Less: gain (loss) on securities sold during the period	357		(46,743)
Unrealized loss recognized during the period on short-term investments held at the reporting date	$	(28,495)	$	(7,145)

On July 31, 2023, the Company entered into an agreement to purchase $25.0 million of equity in Xyla, Inc. for a minority ownership stake. This minority investment was made in the form of cash and shares of the Company’s common stock. The Company accounts for its investment in Xyla as an equity investment without a readily determinable fair value measured under the measurement alternative in accordance with ASC Topic 321, Investments - Equity Securities. As of December 31, 2023, the investment in Xyla has a carrying value of $25.3 million, including transaction costs, and is included in ‘Long-term investments’ in the Consolidated Balance Sheets.

Prior to December 31, 2021, the Company owned certain equity securities without a readily determinable fair value, which it received as part of the consideration for the sale of a subsidiary in 2017. These securities were privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The Company elected to measure this investment at cost, less impairment, adjusted for subsequent observable price changes to estimate fair value. The Company made a “reasonable effort” to identify any observable price changes for identical or similar investments with the issuer that were known and could be reasonably known. Any changes in the carrying value of the equity securities were reported in current earnings as Loss on investment, net. During the year ended December 31, 2021, the Company recorded a $16.7 million impairment loss on investments related to a decline in value due to a sales transaction of an investee. The Company subsequently sold its remaining investments in these securities with proceeds of $14.3 million and a realized loss of approximately $0.3 million. As of December 31, 2021 cumulative impairment losses on these securities were $40.5 million.

Investment in corporate debt security

On April 12, 2022, the Company entered into an agreement with an entity to acquire 4% convertible notes with an aggregate value of $15.0 million. On May 19, 2023, the Company entered into the Note Amendment Agreement (the “Amendment”) with respect to the same entity. The Amendment increased the interest rate on the convertible notes to 6%, extended the maturity date, and subordinated all existing and future obligations, liabilities, and indebtedness of the entity to the entity’s senior creditor, as defined in the Amendment. This investment is included in ‘Long-term investments’ in the Consolidated Balance Sheets and is classified as available-for-sale. The investment was initially measured at its transaction price and subsequently remeasured at fair value, with unrealized gains and losses reported as a component of other comprehensive income.

As of December 31, 2023, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $15.7 million, with a contractual maturity date that was more than one year but less than five years. As of December 31, 2022, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $15.6 million, with a contractual maturity date that was more than one year but less than five years. Cumulative gross unrealized gains on investment in corporate debt securities as of December 31, 2023 and 2022 was approximately $0.7 million and $0.6 million, respectively.

There were no investments in an unrealized loss position as of December 31, 2023 or December 31, 2022.

During the years ended December 31, 2023, 2022, and 2021, the Company did not recognize any other-than-temporary impairment losses on its debt securities.

Equity method investment

On September 25, 2017, the Company entered into a commitment to invest in the OCV Fund. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline.

During the years ended December 31, 2023, 2022, and 2021, the Company recognized (loss) income from equity method investment, net of $(9.3) million, $(7.7) million, and $35.8 million, net of tax expense (benefit), respectively. The gains and losses in the years presented were primarily the result of gains and losses in the underlying investments.

As of December 31, 2023, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $99.9 million. As of December 31, 2022, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $112.3 million. These equity securities are included within ‘Long-term investments’ in the Consolidated Balance Sheets.

As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company is not required to contribute any further capital. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the OCV Fund.