San Luis Obispo -- Facebook stock is not doing as well as anticipated and this may affect the California state budget. The state projected tax income for next year based on estimates that Facebook stock would do better than it is.
When Facebook went public in May many people expected the stock prices to soar including the state of California, which is banking on income tax revenue from Facebook stock.
The state's Legislative Analyst's Office says that "hundreds of millions" of dollars in assumed tax revenue may never materialize because Facebook's stock price continues to slide. The menlo park-based Facebook closed Wednesday trading at $20.88 per share. That's a new low, 45 percent below the initial price.
The analyst's office says much of the Facebook income tax revenues will still come in this year, but adds if the company's stock price remains depressed then hundreds of millions of projected income tax dollars assumed for next year's state budget plan are at risk.
The state was counting on Facebook stocks making a profit in November, when employees are allowed to sell, assuming prices will go up to 45 a share. So far the stock has only closed higher than 38 dollars on it's first day of public trading.
