Convertible Notes, net |
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Convertible Notes, net | Convertible Notes, net On March 5, 2026, we issued $1,000.0 million in aggregate principal amount of 1.75% convertible senior notes due in 2031 (the "Notes") and entered into an investment agreement (the “Investment Agreement”) with Elliott Associates, L.P. and Elliott International, L.P. (collectively, “Elliott”) relating to the issuance and sale of the Notes. The net proceeds were $979.9 million after deducting issuance costs of $20.1 million. Refer to Note 12 for further information on related party arrangements. The Notes are senior, unsecured obligations and are governed by the terms of the indenture dated March 5, 2026. The Notes bear interest at a rate of 1.75% per year payable semi-annually in arrears on March 1 and September 1, beginning September 1, 2026. The Notes mature on March 1, 2031, subject to earlier conversion, redemption or repurchase. Each $1,000 principal amount of the Notes is convertible at an initial conversion rate of 44.0063, which is equivalent to a conversion price of approximately $22.72 per share, and a maximum conversion rate of 57.2082, in each case subject to adjustments for certain events as described in the indenture. Upon conversion, we will pay cash up to the aggregate principal amount of the Notes being converted and deliver shares of our Class A common stock for any conversion value in excess of the principal amount. The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 1, 2030, only under the following circumstances: (1)during any fiscal quarter commencing after June 30, 2026, from the 41st business day until the last business day of such quarter, if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than 150% of the conversion price on each applicable trading day (provided that, if Elliott and its affiliates no longer own a majority of the then-outstanding aggregate principal amount of the Notes prior to the beginning of such 30 consecutive trading day period, the Notes will be convertible at any time during such quarter and the stock price threshold will be 130% of the conversion price); (2)if we call the Notes for optional redemption at any time until close of business on the second scheduled trading day prior to the redemption date; (3)during the five business day period after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of the Notes was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day, as determined following a holder’s request in accordance with the indenture; or (4)upon the occurrence of specified corporate events. On or after December 1, 2030, holders may convert all or any portion of their Notes at any time prior to the close of business on the scheduled trading day preceding the maturity date regardless of the foregoing conditions. Upon conversion of any Note, we will pay or deliver, as the case may be, cash and shares of our Class A common stock, if any. On or after March 5, 2029, the Notes are redeemable for cash, at our option, in whole or in part, if the last reported sale price of our Class A common stock has been at least 130% of the conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date; provided that we may not call less than all of the outstanding Notes for optional redemption unless at least $100 million aggregate principal amount of the Notes are outstanding and not called for optional redemption as of the date of the related redemption notice. With certain exceptions, upon a Fundamental Change, as defined in the indenture, the holders of the Notes may require us to repurchase all or part of the principal amount of the Notes at a repurchase price of 100% of the principal amount of the Notes plus accrued and unpaid interest to, but excluding, the Fundamental Change repurchase date. The indenture includes customary events of default, which may result in the acceleration of the maturity of the Notes, and customary covenants for convertible notes of this type. The net carrying amount of the Notes as of June 30, 2026, is as follows (in thousands):
Debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes at an annual effective interest rate of 2.20%. Interest expense related to the Notes was not material during the three and six months ended June 30, 2026. Capped Calls In June 2026, we entered into privately negotiated capped call transactions (the “Capped Calls”) with certain financial institutions. The Capped Calls cover, subject to anti-dilution adjustments, the 44,006,300 shares of our Class A common stock underlying the Notes; have a strike price of approximately $22.72, which corresponds to the initial conversion price of the Notes, and an initial cap price of $30.59 per share, each subject to certain adjustments; and mature on March 1, 2031. If the average market price of our Class A common stock is greater than the strike price of the Capped Calls upon any conversion of the Notes, we expect the Capped Calls to reduce the potential dilution to our Class A common stock for any conversion value in excess of the principal amount of the Notes, subject to a cap based on the cap price. The Capped Calls are separate transactions and are not part of the terms of the Notes. The Capped Calls meet the criteria for classification in equity and will not be remeasured as long as they continue to meet the conditions for equity classification. We recorded the $99.2 million cost of the Capped Calls as a reduction to additional paid-in-capital offset by the $23.3 million deferred tax impact associated with the integration of the Capped Calls with the Notes.
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