One of my college-age kids is getting an offer from MSFT and I wanted to ask here about their employee stock purchase plan. I’ve never worked for a publicly traded company so I’m not really familiar with these plans.
This is from their brochure:
The ESPP makes it easy for you to become a Microsoft shareholder by allowing you to purchase shares of Microsoft stock at a 10 percent discount. You can contribute from 1 to 15 percent of your pay (up to a maximum of $25,000 per calendar year) through regular payroll deductions. Offering periods are available quarterly, and at the end of each offering period, your total contributions will be used to purchase shares from the plan.
Is the 10% discount a good enough enticement to DCA into this stock? I owned MSFT for a few years before 2000, but sold it (dumb luck) before everything crashed and I have not owned it since. As a Berkshire shareholder the stock looks super expensive to me now at a glance, but I readily admit I don’t know how to value it. My kid has a pretty good bit of Berkshire stock already (for a 21 year old that is), so the thought of DCAing into MSFT doesn’t sound crazy to me.
It looks like shares are only purchased quarterly, and I’m not sure what to think about that. Seems like monthly would be better to DCA into a stock but maybe quarterly isn’t a big negative?