Facebook prices may alter Calif. budget

Facebook's disappointing stock performance could punch a hole in the state budget if share prices don't recover by the end of the year, according to the state's legislative analyst.

State officials, like many investors, assumed the tech company's stock would fetch at least $35 a share after its initial public offering this year. The officials figured California would reap about $1.9 billion in new revenue over this fiscal year and next, from taxes levied once former and current employees are allowed to exercise stock options or sell shares in November.

In all, the state expected that revenue to account for about 1 percent of taxes that California took in over the next two years. But Facebook's stock has performed far below expectations.

After opening at $38 on May 18, the stock price has trended steadily downward. It slipped below $20 for the first time Thursday before closing at $20.04.

full: http://www.sfgate.com/bayarea/article/Facebook-prices-may-alter-Calif-budget-3758837.php