Facebook Stock Crash Hoses California's Tax Revenue

Discussion in 'Economy' started by Trajan, Aug 2, 2012.

  1. Trajan
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    Trajan conscientia mille testes

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    well, I posted this coming issue in one of the facebook threads, where in the state had baked into its budget a big gain from facebook tax revenues.....well, here we are.


    Well, the hits from the Facebook stock implosion keep coming.

    Now, it's the State of California, which apparently overestimated how much tax revenue it was going to collect from Facebook employees after the IPO.

    According to Bloomberg's John Erlichman, California is now saying its "tax revenue is at risk" because it assumed it would get $1.9 billion from newly enriched Facebook employees.

    But now those Facebook employees are only going to get about half as rich as they would have if the stock were still trading at the IPO price.

    And that means that California--and the Federal government--are likely to collect only about half as much Facebook-related tax revenue as they thought.


    Read more: Facebook Stock Crash Hoses California's Tax Revenue - Business Insider
     
  2. Toro
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    Toro Diamond Member

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    The CA budget is f*cked up.

    Yet DC is moving towards CA.
     
  3. jimowencassidy
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    jimowencassidy Rookie

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    what I don't understand is how anyone could have thought investing in Facebook stock was a good thing.
    I know practically NOTHING about stocks, but I told everyone that it was a disaster about to happen. You can't invest on a company with no physical products, who depend on people coming, when they more than likely will go elsewhere in a few years.

    I just didn't think the mess would happen this quickly though.
     
  4. MeBelle
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    MeBelle Mebellien Mothership © Supporting Member

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    Whatever happened to zero based budgeting?
     
  5. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    How come FaceBook didn't just offer shares at 5 or 10 bucks to start with and then just watch it go up?
     
  6. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    the higher the price the more money you put in your pocket. The public mostly believed it was worth the IPO price so it would have been crazy to sell for less when you had no idea it would go up after the IPO
     
  7. Zander
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    Zander Platinum Member

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    Put a bunch of leftists in charge of a booming, vibrant economy and this is what you get- a clusterfuck of failed policies, high taxes, and stupidity.
     
  8. martybegan
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    martybegan Gold Member

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    The money that Cali was counting on wasnt from people who bought Facebook stock on the open market, it was from previous investors, who once are free to trade the stock they got as options would dump a portion of the stock to turn thier invested value into cash.

    As alot of facebook's option recieving stockholders live out west, they figured they would rake in a ton of cash on income taxes once those people sold thier stocks.

    Now, with the value lower, they are thinking that A) any stock sold is of lesser value) and B) some of the investors will hold onto the shares for the longterm. A stock price in the 40's would see alot of these people dump a substantial portion of thier shares.
     

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