By Roland Jones, NBC News
With shares of Facebook hitting new record lows, the state of California might be more concerned than most.
The social network?s declining stock price could cost the Golden State ?hundreds of millions of dollars? in revenue not received from taxes on capital gains, according to a Bloomberg News report.
The state?s fiscal analyst told Bloomberg that the most populous U.S. state?s $91.3 billion budget, signed by Governor Jerry Brown in June, depended on $1.9 billion in income-tax revenue from company insiders such as CEO Mark Zuckerberg. California had expected Zuckerberg and others to exercise options at a share price of $35.
Facebook?s share price hasn?t closed above its $38 IPO price since its first trading day on May 18. On Thursday, Facebook?s shares sank 3 percent to hit another record low of just above $20. They are now down 47 percent from their public trading debut in May.
Last week, Facebook reported its first quarterly results since going public. The company said second-quarter sales growth slowed dramatically in the second quarter. Analysts said Facebook still needs to prove to investors that it can make money from the growing number of users who visit the site using mobile devices.
Facebook?s executives and investors who own stock in the newly-public company will be eligible to sell millions of shares once a certain amount of time has passed after the company?s IPO.
Facebook has a staggered ?lockup period,? with the first one ending Aug. 15 and the second period ending on Nov. 13. The potential for millions of Facebook shares flooding the market after those dates is likely weighing on Facebook?s share price.
?Facebook share prices have fallen far below levels assumed in the state?s revenue projections,? the Legislative Analysts?s Office reportedly said in a report, adding that if Facebook?s share price continues to be lower through November and December, ?hundreds of millions of dollars of income tax revenue assumed in the state budget plan are at risk.?
California, which given its size is classified as the world?s ninth-biggest economy, took in $7.2 billion from income taxes in April, Bloomberg said.
Click here to check Facebook?s share price.?
More money and business news:
Follow NBCNews.com business on Twitter and Facebook?
?
media matters hana taylor momsen xbox live update joan rivers gary carter dies oolong tea
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.