Equity Investments

6 Months Ended

Jan. 31, 2020

Equity Investments [Abstract]

Equity Investments

Note 6—Equity Investments

Equity investments consist of the following:

	January 31, 2020		July 31, 2019
	(in thousands)
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2020 and July 31, 2019	$	72	$	68
Rafael Holdings, Inc. Class B common stock, 27,419 shares at January 31, 2020 and July 31, 2019		555		567
Mutual funds		5,263		5,053
Current equity investments	$	5,890	$	5,688
Visa Inc. Series C Convertible Participating Preferred Stock ("Visa Series C Preferred")	$	4,045	$	3,619
Hedge funds		5,322		5,475
Other		225		225
Noncurrent equity investments	$	9,592	$	9,319

On June 1, 2016, the Company completed a pro rata distribution of the common stock that the Company held in the Company's subsidiary Zedge, Inc. to the Company's stockholders of record as of the close of business on May 26, 2016. The Company received Zedge and Rafael shares in connection with the lapsing of restrictions on Zedge and Rafael restricted stock held by certain of the Company's employees and the Company's payment of taxes related thereto.

In June 2016, upon the acquisition of Visa Europe Limited by Visa, Inc., IDT Financial Services Limited received 1,830 shares of Visa Series C Preferred among other consideration. Each share of Visa Series C Preferred is convertible into 13.886 shares of Visa Class A common stock, subject to certain conditions, starting in June 2020 and will be convertible at the holder's option beginning in June 2028.

The changes in the carrying value of the Company's equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows:

	Three Months Ended January 31,					Six Months Ended January 31,
	2020		2019			2020		2019
	(in thousands)
Balance, beginning of period	$	3,937	$	3,118		$	3,919	$	1,883
Adoption of change in accounting for equity investments		—		—			—		1,213
Adjusted balance		3,937		3,118			3,919		3,096
Adjustment for observable transactions involving a similar investment from the same issuer		408		(71	)		426		(49	)
Redemptions		—		(2	)		—		(2	)
Impairments		—		—			—		—
Balance, end of the period	$	4,345	$	3,045		$	4,345	$	3,045

The Company increased (decreased) the carrying value of the 1,830 shares of Visa Series C Preferred it held by $0.4 million and $(71,000) in the three months ended January 31, 2020 and 2019, respectively, and by $0.4 million and $(49,000) in the six months ended January 31, 2020 and 2019, respectively, based on the fair value of Visa Class A common stock and a discount for lack of current marketability.

Unrealized gains and losses for all equity investments included the following:

	Three Months Ended January 31,				Six Months Ended January 31,
	2020		2019		2020		2019
	(in thousands)
Net gains recognized during the period on equity investments	$	383	$	128	$	409	$	81
Less: net gains and losses recognized during the period on equity investments redeemed during the period		—		—		—		—
Unrealized gains recognized during the period on equity investments still held at the reporting date	$	383	$	128	$	409	$	81