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Facebook hasn't performed the way investors expected.
No one may be more disappointed than those trying to pay the bills at the Capitol in Sacramento.
Before the social networking giant went public last spring, California's Legislative Analyst's Office predicted the state could reap billions in extra income taxes from Facebook stock sales before the end of June 2013.
"Our updated Facebook revenue forecasts now assume a $38 IPO share price, which would rise to $45 in six months, with additional share price growth in later years,” the analysts wrote in mid-May. “We estimate that this would result in $2.1 billion of General Fund revenue collections over the next 13 months."
Facebook did touch $45 for a moment on its disastrous first day of trading, but shares have never gotten close again since.
The LAO now suggests the state should still reap a large of amount of income taxes even at Facebook’s current price. Many insiders received shares at well below that price, and some may cash out a portion of those shares before the end of the year, especially if voters approve a tax hike for 2013.
However, if the stock prices remains depressed , the LAO warns , "hundreds of millions of income tax dollars assumed in the 2012-13 state budget plan are at risk."
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