The state’s nonpartisan Legislative Analyst’s Office based its earlier projections on a stock price for Facebook of $42 per share, which was even more optimistic than the state Department of Finance’s projection of $35 apiece, according to a report in The Sacramento Bee.
The social network’s shares have sputtered, however, trading at around $20.27 per share at the time of this post after going public at $38 each.
In May, the California Legislative Analyst’s Office predicted that if Facebook shares hit $45 apiece six months after the IPO, and kept rising, the combination of capital-gains taxes from investors and taxes on stock awards and options for employees of the Menlo Park-based social network would bring in $2.1 billion in taxes over the next 13 months.
It also predicted at the time:
- $650 million in Facebook-related revenue for California in the 2014 fiscal year.
- $150 million related to the IPO in fiscal-year 2015.
- Tens of millions of dollars in the next two fiscal years.
The Legislative Analyst’s Office said Wednesday, as reported by The Sacramento Bee:
If the company’s stock price remains depressed, hundreds of millions of income tax dollars assumed in the 2012-13 state budget plan are at risk.
And Jason Sisney, who tracks revenues for the organization, told the newspaper:
Given where the price is and that it’s been weak recently, it’s one of the risks that’s out there. I mean, I get questions from Berlin and Amsterdam about it.
Department of Finance Spokesman H.D. Palmer attempted to downplay the situation, telling the Bee:
The issue is not where the share price is now — it’s where it’s going relative to November.
Readers: Do you think the state of California counted its chickens before they were hatched?
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