Fair Value Measurement of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of fair value of assets and liabilities measured on a recurring basis

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated (in millions):


	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	2,154	$	2,154	$	—	$	—
Short-term investments:
Restricted cash	36		36		—		—
Corporate debt securities	2,350		—		2,350		—
Government and agency securities	135		—		135		—

Equity investments with readily determinable fair values	104		104		—		—
Total short-term investments	2,625		140		2,485		—
Equity investment in Adevinta	2,692		2,692		—		—

Derivatives	336		—		122		214
Long-term investments:
Restricted cash	13		13		—		—
Corporate debt securities	646		—		646		—
Government and agency securities	557		—		557		—
Equity investment under the fair value option	431		—		—		431
Total long-term investments	1,647		13		1,203		431
Total financial assets	$	9,454	$	4,999	$	3,810	$	645

Liabilities:
Other liabilities	$	14	$	—	$	—	$	14
Derivatives	$	47	$	—	$	47	$	—


	December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	1,379	$	1,379	$	—	$	—
Short-term investments:
Restricted cash	22		22		—		—
Corporate debt securities	4,152		—		4,152		—
Government and agency securities	25		—		25		—

Equity investments with readily determinable fair values	1,745		1,745		—		—
Total short-term investments	5,944		1,767		4,177		—
Equity investment in Adevinta	5,391		5,391		—		—
Derivatives	553		—		109		444
Long-term investments:
Corporate debt securities	950		—		950		—
Government and agency securities	777		—		777		—
Equity investment under the fair value option	725		—		—		725
Total long-term investments	2,452		—		1,727		725
Total financial assets	$	15,719	$	8,537	$	6,013	$	1,169

Liabilities:
Derivatives	$	17	$	—	$	17	$	—

Schedule of assets measured using significant unobservable inputs

The following table presents a reconciliation of the opening to closing balance of the warrant measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):


	December 31,
	2022		2021
Opening balance at beginning of period	$	444	$	1,051

Exercise of options under warrant	—		(961)
Change in fair value	(230)		354
Closing balance at end of period	$	214	$	444

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of December 31, 2022 (in millions, except percentages):

Fair value

Valuation technique

Unobservable Input

Range (weighted average)(1)

Warrant

214

Black-Scholes and Monte Carlo

Probability of vesting

0.0% - 55.0% (48.3%)

Equity volatility

(49%)

(1)Probability of vesting were weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the points within the range and is not weighted by the relative fair value or notional amount.

The following table presents a reconciliation of the opening to closing balance of the equity investment in Gmarket measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):


	December 31, 2022		December 31, 2021 (1)
Opening balance at beginning of period	$	725	$	—
Recognition of equity investment	—		728
Change in fair value	(294)		(3)
Closing balance at end of period	$	431	$	725

(1) There were no indicators of a potential material change in fair value of the investment between the date of recognition and December 31, 2021. The fair value of the investment was $725 million as of December 31, 2021 due to foreign currency adjustments.

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity investment in Gmarket as of December 31, 2022 that may have a significant impact on the overall valuation (in millions):

Fair value

Valuation technique

Unobservable Input (1)

Range

Equity investment in Gmarket

431

Market multiples

Revenue multiple — GPC method

1.1x — 2.0x

Revenue multiple — GMAC method

1.3x — 4.1x

(1) The primary unobservable inputs used in the fair value measurement of our equity investment in Gmarket under the fair value option, when using the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method under the market multiple approach, are the respective revenue multiples. Significant increases (decreases) in the revenue multiples in isolation would result in significantly higher (lower) fair value measurement. The market multiples are derived from respective groups of guideline public companies and guideline merged and acquired companies.