Annual report pursuant to Section 13 and 15(d)

Common Stock and Net Loss per Common Share

v3.8.0.1
Common Stock and Net Loss per Common Share
 12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
Common Stock and Net Loss per Common Share Common Stock and Net Loss per Common Share
 
Each share of common stock has the right to one vote per share. The holders of common stock are also entitled to receive dividends as and when declared by our board of directors, whenever funds are legally available.

Net Loss per Common Share

Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.
 
Diluted net loss per common share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units, market stock units, performance-based RSUs, potential ESPP shares and instruments convertible
into common stock, to the extent dilutive. Basic and diluted net loss per common share were the same for the years ended December 31, 2015, 2016 and 2017, as the inclusion of all potential common shares outstanding would have been anti-dilutive.
 
The following table sets forth the computation of historical basic and diluted net loss per common share:
 
 
Year Ended December 31,
 
2015
 
2016
 
2017
 
(in thousands except per share amounts)
Numerator
 
 
 
 
 
Net loss
$
(169,661
)
 
$
(342,978
)
 
$
(518,395
)
Less: Stock dividend payable and transaction costs
—

 
—

 
40,166

Net loss available to common stockholders
(169,661
)
 
(342,978
)
 
(558,561
)
Denominator
 
 
 
 
 
Weighted-average common shares outstanding used in computing basic and diluted net loss per common share
213,790

 
230,693

 
243,637

Net loss per common share, basic and diluted
$
(0.79
)
 
$
(1.49
)
 
$
(2.29
)

 
The following potential common shares outstanding were excluded from the computation of diluted net loss per common share because including them would have been anti-dilutive:
 
 
As of December 31,
 
2015
 
2016
 
2017
 
(in thousands)
Shares issuable upon conversion of preferred stock
—

 
—

 
46,747

Restricted stock units
17,272

 
22,404

 
19,276

Options to purchase common stock
12,816

 
9,436

 
4,322

Performance awards*
776

 
2,369

 
1,486

Shares issuable pursuant to the ESPP
296

 
577

 
820

Total common stock equivalents
31,160

 
34,786

 
72,651

*Includes potential common shares outstanding for MSUs and PSUs

On December 9, 2015, we completed an offering of our 1.75% convertible senior notes due 2020. As we have the intention to settle the Notes either partially or wholly in cash, under the treasury stock method, the Notes will generally have a dilutive impact on earnings per share if we are in a net income position for the period and if our average stock price for the period exceeds approximately $16.42 per share of our common stock, the conversion price of the Notes. For the period from the issuance of the offering of the Notes through December 31, 2017, the conversion feature of the Notes was anti-dilutive, as we were in a net loss position for all periods and our average stock price was less than the conversion price.

In connection with the pricing of the Notes, we entered into capped call transactions which increase the effective conversion price of the Notes, and are designed to reduce potential dilution upon conversion of the Notes. Since the beneficial impact of the capped call is anti-dilutive, it is excluded from the calculation of earnings per share. Refer to Note 9 "Debt Instruments" for further details regarding our Notes.