Fair Value Measurement of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

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):


	March 31, 2023		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	$	2,082	$	2,082	$	—	$	—
Short-term investments:
Restricted cash	41		41		—		—
Corporate debt securities	1,643		—		1,643		—
Government and agency securities	137		—		137		—

Equity investments with readily determinable fair values	101		101		—		—
Total short-term investments	1,922		142		1,780		—
Equity investment in Adevinta	2,866		2,866		—		—

Derivatives	314		—		62		252
Long-term investments:
Restricted cash	5		5		—		—
Corporate debt securities	485		—		485		—
Government and agency securities	586		—		586		—
Equity investment under the fair value option	420		—		—		420
Total long-term investments	1,496		5		1,071		420
Total financial assets	$	8,680	$	5,095	$	2,913	$	672

Liabilities:
Other liabilities	$	24	$	—	$	—	$	24
Derivatives	$	32	$	—	$	32	$	—


	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	$	—

Schedule of assets measured using significant unobservable inputs

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


	March 31, 2023		December 31, 2022
Opening balance at beginning of period	$	214	$	444

Change in fair value	38		(230)
Closing balance at end of period	$	252	$	214

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of March 31, 2023 (in millions, except percentages):

Fair value

Valuation technique

Unobservable Input (1)

Range (weighted average)

Warrant

252

Black-Scholes and Monte Carlo

Probability of vesting

0.0% - 55.0% (48.2%)

Equity volatility

(51%)

(1) Probability of vesting was 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):


	March 31, 2023		December 31, 2022
Opening balance at beginning of period	$	431	$	725

Change in fair value	(11)		(294)
Closing balance at end of period	$	420	$	431

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 March 31, 2023 that may have a significant impact on the overall valuation (in millions, except multiples):

Fair value

Valuation technique

Unobservable Input (1)

Range

Equity investment in Gmarket

420

Market multiples

Revenue multiple — GPC method

1.0x — 1.6x

Revenue multiple — GMAC method

1.0x — 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.