Prolonged Facebook Slide Could Hurt California

By: Ja'Mein Beale - Tue, 22 May 2012 14:44:59 -0800

SACRAMENTO, Calif. (AP) - California's budget could take a hit if Facebook's stock price continues to slide.
Gov. Jerry Brown estimated the state will generate between $1.4 billion and $1.9 billion over the next 13 months from taxes related to sales of Facebook stock. The estimates were based on prices at $35 per share.
Facebook went public Friday at $38 per share but was trading below $32, or 15 percent below its IPO price, on Tuesday afternoon.
Deputy Legislative Analyst Jason Sisney says the "potential hit from Facebook's share price is nothing compared to the potential damage from a broader stock slump."
Last week, the nonpartisan Legislative Analyst's Office warned that a number of uncertainties could cause the state's deficit to be "several billion dollars" higher or lower than the governor's $15.7 billion estimate.
(Copyright 2012 by The Associated Press.  All Rights Reserved.)
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