Redeemable Convertible Preferred Stock

9 Months Ended

Sep. 30, 2021

Temporary Equity Disclosure [Abstract]

Redeemable Convertible Preferred Stock

Redeemable Convertible Preferred Stock

Immediately prior to the completion of the IPO, all shares of redeemable convertible preferred stock then outstanding were converted into 153,937,730 shares of common stock on a one-to-one basis and then reclassified into Class B common stock, and their carrying value of $5.6 billion was reclassified into stockholders' equity (deficit). As of September 30, 2021, there were no shares of redeemable convertible preferred stock issued and outstanding.

As of December 31, 2020, there were 154,055,430 authorized shares and 153,937,730 issued and outstanding shares of redeemable convertible preferred stock with aggregate liquidation preference of $326.6 million.

Accretion of the redemption price of the redeemable convertible preferred stock was $2.3 billion and $269.4 million for the three months ended September 30, 2021 and 2020, respectively, and $2.7 billion and $371.5 million for the nine months ended September 2021 and 2020, respectively. The accretion was first recorded against additional paid-in capital to the extent that it became exhausted, with the remainder charged against accumulated deficit.

Preferred Stock Transactions

In January 2020, an investor, also a member of the Board of Directors of the Company (the Board) at that time, entered into a secondary transaction to sell 26,210 shares of redeemable convertible Series A preferred stock, 1,314,830 shares of redeemable convertible Series B preferred stock, and 448,110 shares of redeemable convertible Series C preferred stock to a new investor for a total price in excess of the fair value of the shares. The sale was facilitated by the Company and deemed compensatory to the seller. The amount paid by the investor to acquire the shares was $25.5 million, while the fair value of the shares on the transaction date was $14.7 million. The excess value of $10.8 million was recognized as stock-based compensation expense by the Company in general and administrative expense in its condensed consolidated statements of operations.

See Note 11 for a discussion of stock-based compensation recognized from the secondary transaction involving the repurchases of redeemable convertible preferred stock (as described above) and common stock from the Company’s founders and employees.