Annual report pursuant to Section 13 and 15(d)

Common Stock and Net Loss Per Share

v3.6.0.2
Common Stock and Net Loss Per Share
 12 Months Ended
Dec. 31, 2016
Earnings Per Share [Abstract]  
Common Stock and Net Loss Per Share Common Stock and Net Loss per 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 Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period.
 
Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units, market stock units and performance-based RSUs, to the extent dilutive. Basic and diluted net loss per share were the same for the years ended December 31, 2014, 2015 and 2016, 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 share:
 
 
Year Ended December 31,
 
2014
 
2015
 
2016
 
(in thousands except per share amounts)
Numerator
 
 
 
 
 
Net loss
$
(30,406
)
 
$
(169,661
)
 
$
(342,978
)
 
 
 
 
 
 
Denominator
 
 
 
 
 
Weighted-average common shares outstanding used in computing basic and diluted net loss per share
205,273

 
213,790

 
230,693

Net loss per share, basic and diluted
$
(0.15
)
 
$
(0.79
)
 
$
(1.49
)

 
The following potential common shares outstanding were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive:
 
 
As of December 31, 2014
 
As of December 31, 2015
 
As of December 31, 2016
 
(in thousands)
Options to purchase common stock
10,980

 
12,816

 
9,436

Restricted stock units
11,024

 
17,272

 
22,404

Performance awards*
—

 
776

 
2,369

Total common stock equivalents
22,004

 
30,864

 
34,209

*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. Under the treasury stock method, the Notes will generally have a dilutive impact on earnings per share 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, 2016, the conversion feature of the Notes was anti-dilutive.

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 7 "Debt Instruments" for further details regarding our Notes.