California taxpayers 'at risk' from Facebook stock decline
Paul Sakuma, AP
Not just investors but taxpayers may be the ones suffering from Facebook’s recent decline in stock price.
Stocks for the social network based in Menlo Park, Calif., plummeted to $20.88 at Wednesday’s closing bell, making it one of the worst prices since its $38 initial public offering, according to Bloomberg.
California was poised to gain $1.9 billion in income-tax revenue when Facebook’s executives, like CEO Mark Zuckerberg, exercised options. The state has a $91.3 billion budget.
“Facebook share prices have fallen far below levels assumed in the state’s revenue projections,” the nonpartisan Legislative Analysts’s Office told Bloomberg in a report. “If the lower share prices persist through November and December, hundreds of millions of dollars of income tax revenue assumed in the state budget plan are at risk.”
Facebook's most recent quarterly report showed signs of slowing growth, which led to a 3.8 percent drop and fourth straight decline.