On May 13, 2020, the Company entered into an Equity Distribution Agreement with Morgan Stanley & Co. LLC and Citigroup Global Markets Inc., as its sales agents, pursuant to which the Company could offer and sell from time to time up to an aggregate of 4.0 million shares of the Company’s Class A common stock. As of September 30, 2020, the Company sold all 4.0 million shares and received gross proceeds of $504.0 million at an average selling price of $126.01 per share and incurred issuance costs of $6.8 million.

The Company is authorized to issue 10 million shares of undesignated preferred stock with rights and preferences determined by the Company’s Board of Directors at the time of issuance.

As of September 30, 2020 and December 31, 2019, there were no shares of preferred stock issued and outstanding.

The Company has two classes of authorized common stock, Class A common stock and Class B common stock. All shares of common stock outstanding immediately prior to the initial public offering (“IPO”), including shares of common stock issued upon the conversion of the convertible preferred stock, were converted into an equivalent number of shares of Class B common stock. All common stock, stock options, and restricted stock units issued at the time of, and subsequent to, the IPO are exercised or vested into shares of Class A common stock.

As of September 30, 2020, the Company had reserved shares of common stock for issuance as follows (in thousands):

* The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan.

The Company has two equity incentive plans, the 2008 Equity Incentive Plan (the “2008 Plan”) and the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective in September 2017 in connection with the IPO. No further shares have been issued under the 2008 Plan. The 2017 Plan provides for the grant of incentive stock options to the Company’s employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of equity compensation to the Company’s employees, directors and consultants.

Restricted stock units granted under the plan are subject to continuous service. Options granted under the plans are granted at a price per share equivalent to the fair market value on the date of grant.

Restricted stock unit activity for the nine months ended September 30, 2020 is as follows (in thousands, except per share data):

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Balance, December 31, 2019 - outstanding		4,544		$	67.30
Awarded		1,286			137.52
Released		(898	)		65.89
Forfeited		(283	)		71.73
Balance, September 30, 2020 - outstanding		4,649		$	86.73

The grant-date fair value of restricted stock units granted during the nine months ended September 30, 2020 and 2019 was $176.9 million and $127.3 million, respectively.

The fair value of restricted stock units that vested during the three months ended September 30, 2020 and 2019 was $21.6 million and $10.6 million, respectively, and during the nine months ended September 30, 2020 and 2019 was $59.2 million and $28.2 million, respectively. Total unrecognized compensation cost related to restricted stock units as of September 30, 2020 was $343.7 million, which the Company expects to recognize over 2.43 years.

The following table summarizes the Company’s stock option activities under the 2008 Plan and 2017 Plan (in thousands, except per share data):

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value
Balance, December 31, 2019 - outstanding		11,124		$	14.84		6.2		—
Granted		596			144.60		—	$	54.22
Exercised		(2,089	)		5.37		—		—
Forfeited and expired		(51	)		8.36		—		—
Balance, September 30, 2020 - outstanding		9,580		$	25.01		5.9		—	$	1,569,042
									—
Options exercisable at September 30, 2020		6,405		$	7.39		5.0		—	$	1,162,018

The intrinsic value for options exercised during the three months ended September 30, 2020 and 2019, was $149.9 million and $137.5 million, respectively, and during the nine months ended September 30, 2020 and 2019 was $269.6 million and $383.0 million, respectively. Intrinsic value represents the difference between the fair values of the Company’s common stock and the options’ exercise price on the date of grant.

As of September 30, 2020, the Company had $58.6 million of unrecognized stock compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 1.84 years.

The Company measures the cost of awards granted under equity incentive plans based on the grant date fair value. The Company uses the straight-line method for expense recognition and recognizes forfeitures as they occur.

The following table shows total stock-based compensation expense for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Cost of platform revenue	$	206	$	120	$	649	$	238
Cost of player revenue		362		287		1,010		776
Research and development		14,873		10,230		41,476		28,020
Sales and marketing		11,572		6,415		31,244		16,555
General and administrative		7,894		5,566		20,969		13,564
Total stock-based compensation	$	34,907	$	22,618	$	95,348	$	59,153

The fair value of options granted under the equity incentive plans is estimated on the grant date using the Black-Scholes option-valuation model. The assumptions used in the Black-Scholes model are as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Dividend rate		—		—		—		—
Expected term (in years)	5.0 - 6.73		5.0 - 6.73		5.0 - 6.73		5.0 - 6.73
Risk-free interest rate	0.22 - 0.46%		1.35 - 1.79%		0.22 - 1.67%		1.35 - 2.56%
Expected volatility	36.9 - 38.2%		35 - 36%		35.8 - 38.6%		35 - 36%