We invest in marketable debt securities which are classified as available-for-sale. We elected the fair value option on our available-for-sale debt securities and carry them at fair value with adjustments to fair

value presented in other expense (income), net in our consolidated statements of operations. Investments on the consolidated balance sheet consisted of the following:


	December 31, 2021
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Debt securities:
Asset-backed securities	$	5,082	$	—	$	(4)	$	5,078
Commercial paper	13,717		—		—		13,717
Corporate bonds	7,392		—		(8)		7,384
Government bonds	1,012		—		(2)		1,010
Total investments	$	27,203	$	—	$	(14)	$	27,189

We did not hold any investments as of December 31, 2020. All of our debt securities as of December 31, 2021 had a stated contractual maturity or redemption date within one year.

Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows:


	December 31, 2020
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	1,026,034	$	—	$	—	$	1,026,034
Cash and securities segregated under federal and other regulations:
U.S. Treasury securities	134,994		—		—		134,994
User-held fractional shares	802,483		—		—		802,483
Other current assets:
Equity securities - securities owned	3,222		—		—		3,222
Total financial assets	$	1,966,733	$	—	$	—	$	1,966,733

Liabilities
Accounts payable and accrued expenses:
Equity securities - referral program liability	$	695	$	—	$	—	$	695
Fractional share repurchase obligations	802,483		—		—		802,483
Total financial liabilities	$	803,178	$	—	$	—	$	803,178


	December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	4,003,552	$	—	$	—	$	4,003,552


Investments:
Asset-backed securities	—		5,078		—		5,078
Commercial paper	—		13,717		—		13,717
Corporate bonds	—		7,384		—		7,384
Government bonds	1,010		—		—		1,010
User-held fractional shares	1,834,479		—		—		1,834,479
Other current assets:
Equity securities - securities owned	13,611		—		—		13,611
Total financial assets	$	5,852,652	$	26,179	$	—	$	5,878,831

Liabilities
Accounts payable and accrued expenses:
Equity securities - referral program liability	$	97	$	—	$	—	$	97
Fractional shares repurchase obligations	1,834,479		—		—		1,834,479
Total financial liabilities	$	1,834,576	$	—	$	—	$	1,834,576

In February 2021, we issued two tranches of convertible notes (the “convertible notes”) and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (the “warrant liability”). We elected the fair value option for both tranches of the convertible notes as we believe it best reflects their underlying economics. Under the fair value option, the convertible notes were initially measured at their issuance date estimated fair value and subsequently remeasured at their estimated fair value at the end of each reporting period. Upon the closing of the IPO, all of our outstanding convertible notes and warrants were reclassified from liability to equity. See Note 11 for further information.

For the year ended December 31, 2021, we recorded expense due to changes in fair value of $1.92 billion for the convertible notes in our consolidated statements of operations, none of which was attributable to the change in the instrument-specific credit risk. We have elected to present the component related to accrued interest in the change in fair value of convertible notes and warrant liability.

For the year ended December 31, 2021, due to changes in fair value, we recorded $127.1 million for the warrant liability in our consolidated statements of operations.


(in thousands)	Convertible notes		Warrant liability
Beginning of period, January 1, 2021	$	—	$	—
Issued during the period	3,299,031		252,944
Change in fair value	1,918,565		127,092
Reclassifications to equity	(5,217,596)		(380,036)
End of period, December 31, 2021	$	—	$	—