Friday, August 24, 2012

FaceBook's share drop and CA state budget

FaceBook's decline in share prices caught the state of California "counting their chickens" too early...

Fox Business reports:

California was counting on $1.5 billion in tax revenue through June because of Facebook’s (FB: 19.51, +0.07, +0.36%) initial public offering. It’s also counting on another $400 million in new sales tax revenue and new tax hikes on the rich.

But the state is now scrambling because it got hypnotized and overstated by a factor of nearly 50% the amount of capital gains tax revenue that it thought was coming in from the Facebook IPO. Based on Facebook’s latest share price, the state is on track to get just $707 million, 47% less than what it projected.

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