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COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY
NOTE 14: COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY
Preferred Stock
Pursuant to our Charter, our board of directors may issue shares of our preferred stock in one or more series and, subject to the applicable law of the State of Delaware, our board of directors may set the powers, rights, preferences, qualifications, limitations and restrictions of such preferred stock. As of
December 31, 2023, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding.
Common Stock
Voting Rights
We have three authorized classes of common stock: Class A, Class B, and Class C. Holders of our Class A common stock are entitled to one vote per share on all matters to be voted upon by our stockholders, holders of our Class B common stock are entitled to 10 votes per share on all matters to be voted upon by our stockholders and, except as otherwise required by applicable law, holders of our Class C common stock are not entitled to vote on any matter to be voted upon by our stockholders. The holders of our Class A common stock and Class B common stock vote together as a single class, unless otherwise required by our Charter or applicable law.
Conversion of Class B Common Stock
Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. All Class B common stock will automatically convert (as a class) into Class A common stock upon the earliest of (i) the date and time specified by the affirmative vote of the holders of at least 80% of the then-outstanding shares of Class B common stock, voting separately as a class, (ii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date on which the number of then-outstanding shares of Class B common stock represents less than 5% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding, (iii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date that (A) each founder is no longer providing services to our Company as an officer, employee, or consultant and (B) each founder is not a director of our Company as a result of a voluntary resignation by such founder from our board of directors or as a result of a written request or agreement by such founder not to be renominated as a director of our Company at an annual or special meeting of stockholders, (iv) nine months after the death or total disability of both founders (subject to a delay of up to 18 months as may be approved by a majority of our independent directors), or (v) August 2, 2036, the date that is 15 years from the completion of our IPO.
Shares of Class B common stock will also automatically convert into shares of Class A common stock upon sale or transfer except for certain permitted transfers described in our Charter. In addition, each share of Class B common stock held by a stockholder who is a natural person, or held by permitted transferees or permitted entities of such natural person (each as described in our Charter) will automatically convert into shares of Class A common stock nine months following the death or total disability of such natural person (subject to a delay of up to 18 months as may be approved by a majority of our independent directors). Notwithstanding the foregoing, in the event such natural person is a founder, to the extent (i) a person designated by such founder and approved by a majority of the independent directors then in office or (ii) the other founder, in each case, has or shares voting control over the shares of Class B common stock held by the deceased or disabled founder, such shares will be treated as being held of record by such person or other founder and will not convert into shares of Class A common stock as a result of such founder’s death or total disability.

Conversion of Class C Common Stock
Upon the conversion or exchange of all outstanding shares of our Class B common stock into shares of Class A common stock, each outstanding share of Class C common stock will convert automatically into one share of Class A common stock on the date or time fixed by our board of directors.
Dividend Rights
Subject to the rights of any holders of our preferred stock, the holders of our common stock will be entitled to receive ratable dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for the payment of dividends.
Right to Receive Liquidation Distributions
If we liquidate, dissolve or wind up, after all liabilities and, if applicable, the holders of each series of our preferred stock have been paid in full, the holders of our common stock will be entitled to share ratably in all remaining assets.
No Preemptive or Similar Rights
Our common stock has no preemptive or conversion rights or other subscription rights. No redemption or sinking fund provisions are applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
The convertible notes issued in February 2021 were converted into 137.3 million shares of Class A common stock at a conversion price of $26.60 per share upon completion of our IPO.
Warrants
As of December 31, 2023, warrants outstanding consisted of warrants to purchase 14.3 million shares of Class A common stock with a strike price of $26.60 per share. The warrants expire on February 12, 2031 and can be exercised with cash or net shares settled at the holder’s option. In aggregate, the maximum purchase amount of all warrants is $380 million. As of December 31, 2023, the warrants have not been exercised and are included as a component of additional paid in capital on the consolidated balance sheets.
Share Repurchase and Retirement
On August 30, 2023, we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with the United States Marshal Service (the “USMS”), for and on behalf of the United States, pursuant to which we agreed to repurchase 55,273,469 shares of the Company's Class A common stock from the USMS for $10.96 per share. The transaction closed on August 31, 2023. We repurchased, and subsequently retired, all of the shares for an aggregate amount of $608 million, recorded entirely in additional paid-in capital on the consolidated balance sheet in absence of retained earnings, which included $2 million in transaction costs. As of December 31, 2023, we have accrued $3 million, also recorded in additional paid-in capital, related to the 1% excise tax on net share repurchases as a result of the Inflation Reduction Act of 2022.
Equity Incentive Plans
Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan
Our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), provided for share-based awards to eligible participants, granted as incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”) or restricted stock awards (“RSAs”). Our 2013 Plan was terminated in connection with adoption of our 2020 Plan, and our 2020 Plan was terminated in connection with the adoption of our 2021 Plan (defined below) but any awards outstanding under our 2013 Plan and 2020 Plan remain in effect in accordance with their terms. Any shares that were or otherwise would
become available for grant under the 2013 Plan or 2020 Plan will be available for grant under the 2021 Plan. No new awards may be granted under our 2013 Plan or 2020 Plan.
2021 Omnibus Incentive Plan
Our 2021 Omnibus Incentive Plan (the “2021 Plan”) became effective on July 27, 2021, and provides for the grant of share-based awards (such as options, including ISOs and NSOs, SARs, RSAs, RSUs, performance units, and other equity-based awards) and cash-based awards. Under the 2021 Plan, options could be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted mostly vest monthly on a straight-line basis and expire seven or ten years from the date of grant.
As of December 31, 2023, an aggregate of 405 million shares had been authorized for issuance under the 2013 Plan, 2020 Plan, and 2021 Plan, of which 131 million shares had been issued under the plans, 69 million shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 205 million shares remained available for new grants under the 2021 Plan. On January 1, 2024, an additional 43.6 million shares became available for grant under the 2021 Plan pursuant to its annual evergreen feature.
Stock Option Activity
A summary of stock option activity for the year ended December 31, 2023 is as follows:
Number of SharesWeighted-Average Exercise PriceWeighted- Average Remaining Life
Total Intrinsic Value
(in millions)
Balance at December 31, 202215,226,096$4.73 4.68$72 
Granted during the period— — 
Exercised during the period(2,443,991)2.07 
Expired during the period(179,524)13.14 
Forfeited during the period(461,015)14.15 
Balance at December 31, 202312,141,566 $4.78 3.76$100 
Options vested and expected to vest at December 31, 202312,141,566$4.78 3.76$100 
Options exercisable at December 31, 202310,667,515$3.50 3.57$100 
The weighted-average grant date fair value of options granted during the years ended December 31, 2022 was $14.15. No options were granted during 2021 nor 2023. The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31,
202120222023
Dividend yieldN/A0 %N/A
Risk-free interest rateN/A1.61 %N/A
Expected volatilityN/A40.72 %N/A
Expected term (years)N/A4.61N/A
The total intrinsic value of options exercised during 2021, 2022, and 2023 was $179 million, $25 million, and $20 million. The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the market value of the stock at the time of exercise. The total
grant date fair value of options that vested during 2023 was $7 million and was immaterial for 2021 and 2022.
Time-Based RSUs
We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition (“Time-Based RSUs”). The following table summarizes the activity related to our Time-Based RSUs for the year ended December 31, 2023:
Number of RSUsWeighted- average grant date fair value
Unvested at December 31, 202256,116,782 $18.55 
Granted24,267,715 9.84 
Vested(31,081,439)15.77 
Forfeited(14,751,060)18.41 
Unvested at December 31, 202334,551,998 $14.99 
The fair value of Time-Based RSUs vested during 2021 2022 and 2023 was $1,054 million, $542 million and $490 million , respectively.
Market-Based RSUs
In 2019 and 2021, we granted Market-Based RSUs to our founders under which vesting is conditioned upon both the achievement of share price targets and the continued employment by each recipient over defined service periods. There were no Market-Based RSUs granted during 2022 or 2023.
As of December 31, 2023, none of the 2021 Market-Based RSUs had vested based on share price targets. In February 2023, we cancelled the 2021 Market-Based RSUs of 35.5 million unvested shares. We recognized $485 million SBC expense related to the cancellation during the year ended December 31, 2023, which was included in the general and administrative expense in our consolidated statements of operations. No further expense associated with these awards was recognized after the cancellation. No other payments, replacement equity awards or benefits were granted in connection with the cancellation.
The following table summarizes the activity related to our Market-Based RSUs for the year ended December 31, 2023:
Eligible to Vest(1)
Not Eligible to Vest(2)
Total Number of RSUsWeighted- average grant date fair value
Unvested at December 31, 2022806,858 57,650,926 58,457,784 $23.50 
Granted— — — — 
Vested(461,062)— (461,062)2.34 
Cancelled— (35,520,000)(35,520,000)22.68 
Unvested at December 31, 2023345,796 22,130,926 22,476,722 $25.67 
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(1)Represents RSUs that became eligible to vest upon achievement of share price targets and vest upon satisfaction of time-based service requirements.
(2)Represents RSUs that have not yet become eligible to vest because share price targets have not yet been achieved.

The fair value of Market-Based RSUs that vested during 2021, 2022, and 2023 was $161 million,$5 million and $5 million.
2021 Employee Share Purchase Plan
Our ESPP became effective on July 27, 2021 and enables eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation up to the statutory maximum. The purchase price is equal to 85% of the fair market value of a share of our common stock on the first date of an offering or the date of purchase, whichever is lower. The ESPP has an automatic rollover feature, whereby employees begin a new 12-month offering period if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date.
The aggregate number of shares reserved for issuance under the ESPP will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 1% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. No more than 200 million shares of common stock may be issued under our ESPP.
In the year ended December 31, 2023, 2 million shares were purchased under the ESPP at a weighted-average price of $7.09. The fair value of shares to be issued under our ESPP was estimated on the grant date using the Black-Scholes option pricing model. As of December 31, 2023, approximately 30.4 million shares remained available for issuance under the ESPP. On January 1, 2024, an additional 8.7 million shares became authorized for issuance under the ESPP pursuant to its annual evergreen feature.

Share-Based Compensation
The following table presents SBC in our consolidated statements of operations for the periods indicated:
Year Ended December 31,
(in millions)20212022
2023(1)
General and administrative$885 $425 $640 
Technology and development 610 212 211 
Operations 20 8 8 
Brokerage and transaction7 5 7 
Marketing50 4 5 
Total$1,572 $654 $871 
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(1) Included in the table above, we recorded SBC expense of $567 million related to Market-Based RSUs, $292 million related to Time-Based RSUs, $8 million related to ESPP, and $4 million related to options for the year ended December 31, 2023. The tax benefits recognized in the consolidated statements of operations for SBC were $73 million for year ended December 31, 2023 and were not material during the years ended December 31, 2021 and 2022.
In March 2021, we modified certain Time-Based RSUs of approximately 500 employees to remove the one-year vesting cliff, considered to be an improbable to improbable modification. The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $39.75 per share was used to calculate SBC expense.
We have capitalized SBC expense related to internally developed software of $35 million, $28 million, and $17 million for years 2021, 2022, and 2023.
The April 2022 Restructuring and the August 2022 Restructuring resulted in net reductions of $24 million and $53 million in SBC expense, respectively. Both reductions were substantially related to
Time-Based RSUs. The net reductions were primarily recognized in technology and development expense, $16 million and $22 million, and general and administrative expense, $6 million and $28 million.
As of December 31, 2023, there was $355 million of unrecognized SBC expense that is expected to be recognized over a weighted-average period of 1.08 years.