Calif. worries Facebook could lead to stock slump

Associated Press + More

SACRAMENTO, Calif. (AP) — California's budget could take a hit if Facebook's stock price keeps sliding.

Gov. Jerry Brown estimated the state will generate between $1.4 billion and $1.9 billion over the next 13 months from taxes related to sales of Facebook stock. The estimates were based on prices at $35 per share.

Facebook went public Friday at $38 per share but was trading below $32, or 15 percent below its IPO price, on Tuesday afternoon.

Deputy Legislative Analyst Jason Sisney says the "potential hit from Facebook's share price is nothing compared to the potential damage from a broader stock slump."

Last week, the nonpartisan Legislative Analyst's Office warned that a number of uncertainties could cause the state's deficit to be "several billion dollars" higher or lower than the governor's $15.7 billion estimate.

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