Max
Keiser: “One of the biggest economies of the world rolls over
because – a piece of software that took a college kid five minutes
to write – that Wall St. decided was worth 104 bn. – has now been
exposed as a giant Ponzi scheme”.
California
Says Tax Revenue ‘At Risk’ From Facebook Drop
Facebook
Inc. (FB)’s declining price may cost California “hundreds of
millions of dollars” in revenue expected from taxes on capital
gains, the state’s fiscal analyst said.
3
August, 2012
The
owner of the world’s largest online social network, touched $19.82
today, the lowest price since the Menlo Park, California-based
company first offered shares to the public at $38 on May 17.
The
most populous U.S. state’s $91.3 billion budget, signed by Governor
Jerry Brown in June, counted on $1.9 billion in income-tax revenue
from company insiders such as Chief Executive Officer Mark Zuckerberg
exercising options or sell shares, assuming an average price of $35.
Facebook, which touched $45 May 18, has averaged $29.49 on the Nasdaq
stock market.
“Facebook
share prices have fallen far below levels assumed in the state’s
revenue projections,” the nonpartisan Legislative Analyst’s
Office said yesterday 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.”
Ashley
Zandy, a Facebook spokeswoman, said the company didn’t have a
comment. Executives and investors were expected to sell 157.4 million
shares in the initial public offering, according to a regulatory
filing.
Sales
Growth
Facebook,
which hasn’t closed above the $38 IPO price since May 18, its first
day of trading, last week said second-quarter sales growth was 32
percent from the same period a year earlier, down from 45 percent in
the previous three months. The company still needs to prove to
investors that it can profit from the growing number of users who
access the site on mobile devices, said Tom Forte, an analyst at
Telsey Advisory Group in New York.
Zynga
Inc. (ZNGA), an online-game developer based in San Francisco, went
public in December and has declined from a $15.91 high on March 2 to
as low as $2.68 today, a record.
A
Zynga investor sued the company and the IPO underwriters this week,
claiming shareholders were misled about its financial health. The
company reported lower-than-expected second-quarter earnings July 25,
and fell 37 percent the next day.
State
finance officials typically update revenue estimates when presenting
the governor’s proposed budget in January. New information on
Facebook probably will be used in that update, according to the
Legislative Analyst’s Office.
California,
the world’s ninth-biggest economy, took in $7.2 billion from income
taxes in April.
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