California Dreaming Turns Into Nightmare As Sinking FaceBerg Stock Means Less State Revenue

Tyler Durden's picture


Remember just a few happy months back when California's legislators were cock-a-hoop over the exuberance in Silicon Valley and all the yummy IPO/Capital Gains taxes they would tithe away - instantly solving all funding issues? Yeah, not gonna happen. As reported by the Sacramento Bee this evening:

The state's Legislative Analyst's Office said Wednesday that 'hundreds of millions' of dollars in assumed tax revenues may never materialize due to the continued slide in Facebook's stock price.


Menlo Park-based Facebook closed Wednesday trading at $20.88 per share, a new low 45 percent below the initial price. The state Department of Finance assumed the social media giant would trade at $35 by November, while the Analyst's Office believed it would trade at $42 at that time. The November marker is significant because another wave of insiders becomes eligible to sell shares at that point.


The Analyst's Office said today that much of the Facebook income tax revenues will still come in. But the LAO added that "if the company's stock price remains depressed, hundreds of millions of income tax dollars assumed in the 2012-13 state budget plan are at risk."

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Wed, 08/01/2012 - 21:22 | 2670830 fonzannoon
fonzannoon's picture

Yeah but it's all good because Calpers is shorting facefart....right?

Wed, 08/01/2012 - 21:40 | 2670874 wang (not verified)
wang's picture

all is right with the world according to this ABC headline

60 House Bills to Name Post Offices, Zero(hedge) To Fix Mail Service

Wed, 08/01/2012 - 21:57 | 2670919 AlaricBalth
AlaricBalth's picture

From May 18 HuffPo:
California's Tax Coffers: The Legislative Analyst's Office (LAO), a nonpartisan adviser to the California government, recently estimated the state could take in nearly $2.9 billion in tax revenue as a result of the Facebook IPO between now and fiscal year 2014-15. The bulk of that will come in the 2012-13 fiscal year, according to the LAO. And Facebook alone will count for about a fifth of the growth in personal income in the entire state in calendar year 2012, the LAO estimates. This is money California desperately needs.

Perhaps Governor Brown can pledge future revenues from federal government disaster relief payments in the remote event the San Andreas Fault goes.

Wed, 08/01/2012 - 22:30 | 2670987 Precious
Precious's picture

"Benjamin Shalom Bernanke Federal Post Office, Yukon, Alaska"

Wed, 08/01/2012 - 22:37 | 2671007 The Monkey
The Monkey's picture

Let me get this straight. California is assuming Facebook trades at $35, while CALPERS assumes long-term returns of 7.0% annually. THEN, Janet Yellen comes guns blazing into the FOMC demanding more stimulus for her broke-ass crack smoking state???

What the fuck?

Wed, 08/01/2012 - 23:18 | 2671085 The Big Ching-aso
The Big Ching-aso's picture



California creaming on such a losers day.

Thu, 08/02/2012 - 00:01 | 2671135 AlaricBalth
AlaricBalth's picture

Here is the list of 13F filings for FB as reported by Nasdaq as of June 30, 2012. A virtual rogues gallery and proof that story stocks like FB are sold to fund managers, not bought. MS institutional brokers had a field day in the first 2 weeks of May. "I got another fish for 100,000 shares!!!!

Thu, 08/02/2012 - 00:17 | 2671147 Manthong
Manthong's picture

How freaking pathetic that one of the worlds top ten economies would even notice a twenty something's Internet splash in the budget. 

Thu, 08/02/2012 - 00:32 | 2671164 AlaricBalth
AlaricBalth's picture

And if anyone is wondering whether the state of California or its entities own any shares of FB, here is an answer.
From Time magazine, Feb 7, 2012.

"CalSTRS own Facebook shares through its private equity managers and plans to purchase more once Facebook goes public, according to Janice Hester-Amey, a portfolio manager in CalSTRS Corporate Governance unit."

So not only does California lose projected revenues, their teachers pension is further away from their discount rate (projected returns).

California Dreaming' INDEED!!!!

Thu, 08/02/2012 - 01:58 | 2671230 Freddie
Freddie's picture

They just loot the pension plans and the libs think it is grand.

It is amazing that the state was actually thinking that a company that makes nothing except web pages, could help plug their state budget woes from capital gains tax revenues from this dogshit stock. 

The even bigger irony is they pushed out manufacturing and energy companies that actually create jobs, wealth and taxes.  The whole f***ing state needs to be nuked from orbit.  It is the only way to be sure.  

A little movie dialogue there from a movie not really made in Caliie but greenlighted by a studio there.

Thu, 08/02/2012 - 06:13 | 2671338 GCT
GCT's picture

LOL Freddie funny how you mention the movie industry.  CA is giving Hollywood incentives to film in CA.  The movie industry spokesperson stated filming in CA just cost too much so they film out of state now.  Maybe CA should look at being business friendly instead of running them out of the state.

Thu, 08/02/2012 - 08:40 | 2671595 Isotope
Isotope's picture

Whichi is amazing when you think about it.

Consider all the people involved, the stars and their luxury mobile homes, the massive amount of heavy equipment, the huge number of various large and small items they need to produce a movie. Then they have to transport them across the country, or sometimes to another continent, and back again. And it's still cheaper than dealing with the expense of doing it in California. How bad does the business environment have to be for this to be true?

Wed, 08/01/2012 - 23:41 | 2671106 Never One Roach
Never One Roach's picture

Broke Municipalities Look to Bankruptcy Option


Economist Allan Meltzer once quipped that “Capitalism without failure is like religion without sin. It doesn’t work.”

The problem in the public sector is that government never is allowed to fail. There never is a day of reckoning no matter how poorly a government agency may provide its so-called services. Because there are no real customers in the government world, there’s never any hell to pay when the public is mistreated, when resources are wasted and when incompetents enrich themselves in the name of serving the public. Often, the worst agencies are rewarded for their failure by being granted additional public dollars.




CA chickens coming home to roost

July 23, 2012

Katy Grimes: A fourth California city is on the verge of bankruptcy.

The news that Compton is about to file for federal bankruptcy protection is not surprising. But news that Santa Monica may also file, is.



Thu, 08/02/2012 - 09:10 | 2671753 sessinpo
sessinpo's picture

"What the f?"

I know you aren't really surprised.

As with any liberal/sociast state, they'll do any thing, and I do mean any thing to deny reality and facts  of a failed ideology. The worse staes off are the most liberal, CA, IL & NY. They have so many people entrenched into government  support, they are  not only fighting for their ideology, but their financial support. It is their way of life and what they know. That is why liberals are scared sh*tless by the tea party. The tea party would cut off their gravey train. So we'll just let them melt down on their own. At some point they will become beggars. They already are (being so depending on government), but most are to dumb to realize it.

Wed, 08/01/2012 - 22:33 | 2670996 ZeroAvatar
ZeroAvatar's picture

They went from 'The Whole Year Inn' to 'The Hole Your In' .     (HT Leaving Las Vegas)

Wed, 08/01/2012 - 22:42 | 2671020 carguym14
carguym14's picture

They should change the name to:

Legislative Mathematical Analyst's Office (LMAO)


Wed, 08/01/2012 - 23:30 | 2671100 The Big Ching-aso
The Big Ching-aso's picture



The hi-speed bullet train from Bumphuck, CA to Bumphucked, CA will save their bacon.

Wed, 08/01/2012 - 21:45 | 2670885 Pool Shark
Pool Shark's picture



No problem; I hear MoonBeam's backup financing plan for the state is to use the entire UC budget to buy lottery tickets.

It can't lose!!!


Wed, 08/01/2012 - 22:52 | 2671046 tom a taxpayer
tom a taxpayer's picture

So, I'm on the first tee with Zuckerberg in the California Himalayas. I give him the driver. He hauls off and whacks one - big hitter, Zuckerberg - long, into a ten-thousand foot crevasse, right at the base of Mount Whitney glacier. Do you know what Zuckerberg says? Gunga galunga... gunga, gunga-lagunga. So we finish the eighteenth and he's gonna stiff me. And I say, "Hey, Zuckerberg, hey, how about a little something, you know, for the effort, you know." And he says, "Oh, uh, there won't be any money, but when you die, on your deathbed, you will receive total consciousness." So me and California got that goin' for us, which is nice. 

True story as told by Carl Spackler in Frontline documentary "Caddyshack".

Wed, 08/01/2012 - 21:56 | 2670915 mofreedom
mofreedom's picture

Calpers equals CAL People Epilectic Retard Socialists. I told you before Clinton refused to sell this mess to China.  Amen!

Wed, 08/01/2012 - 22:05 | 2670939 mofreedom
mofreedom's picture

Do ya'll know what NAACP means?  Not racial, but political.  Amen!

Wed, 08/01/2012 - 22:20 | 2670972 gookempucky
gookempucky's picture

NAACP------------- niggers arent always colored people.

Thu, 08/02/2012 - 01:35 | 2671215 monad
monad's picture

No Affirmative Action for Caucasian People

Thu, 08/02/2012 - 03:13 | 2671280 AnAnonymous
AnAnonymous's picture

That would be un-'american' as the US has been a story of affirmative actions from the start.

Clearly, Indo Europeans living in the US resent the loss of the monopoly as the affirmative action recipients but it remains: the story has started on 1776, July, 4th.

Thu, 08/02/2012 - 09:30 | 2671813 sessinpo
sessinpo's picture

To the winner goes the spoils. It is interesting how you equate war with a lobbying group.


And clearly every former colonization from Europe would also be as you described - resentment of the loss of the monopoly as the affirmative action recipients.

And I'll take it a step further. How about the inhabitants before Europeans. When any "invading nation" takes over, they are taking affirmative action for themselves over the earlier inhabitants. So how far to you want to go back and shall we talk about BS liberal reparations?

Thu, 08/02/2012 - 00:34 | 2671168 ACP
ACP's picture

In other news, San Bernardino, CA declares bankruptcy and insider selling is the highest in recorded history.

Thu, 08/02/2012 - 01:22 | 2671203 Freddie
Freddie's picture

Union Dem scum turning the entire state into Tiajuana were counting on that Faceshit tax money.

Wed, 08/01/2012 - 21:22 | 2670831 q99x2
q99x2's picture

FaceBook: the tax shelter of 2012.

Wed, 08/01/2012 - 21:25 | 2670836 TruthInSunshine
TruthInSunshine's picture

The textbook definition of a Banana Republic:  The largest state in the union and purported 8th largest economy in the world, either temporarily having the means to pay its bills or not, depending on what a bubble v2.0 stock does since its IPO.

Wed, 08/01/2012 - 21:33 | 2670859 SHEEPFUKKER

Where is the Governator?

Wed, 08/01/2012 - 21:39 | 2670871 nmewn
nmewn's picture

Dancing on Moonbeams?

Wed, 08/01/2012 - 22:03 | 2670933 Marley
Marley's picture

Doing Amyl with his Enron creators.

Wed, 08/01/2012 - 22:10 | 2670950 Bastiat
Bastiat's picture

Governator is gone. Gov. Moonbeam, last I heard, was in Vegas sucking up to his owners, the CA teachers union.  Suck it, Gerry, suck it good.

Wed, 08/01/2012 - 21:58 | 2670923 Fecklesslackey
Fecklesslackey's picture

You do know that as the 8th largest economy in the world, they should be at least allowed to print their own money

Wed, 08/01/2012 - 22:18 | 2670971 Hedgetard55
Hedgetard55's picture

They use IOUs instead.

Wed, 08/01/2012 - 23:59 | 2671132 goldfish1
goldfish1's picture

California has been the number one food and agricultural producer in the United States for more than 50 consecutive years.


More than half the nation's fruit, nuts, and vegetables come from here.

California is the nation's number one dairy state.

California's leading commodity is milk and cream. Grapes are second.

Thu, 08/02/2012 - 01:07 | 2671192 horseman
horseman's picture

And the Dems have been waging war on the farmers and ranchers for years.  The Dems even managed to distribute water to Dem congressional districts and let Rep districts go dry.

Thu, 08/02/2012 - 01:14 | 2671197 Edmon Plume
Edmon Plume's picture

Your fruits and nuts - they're everywhere.  Oregon used to be partially sane, as did WA, but those fruits and nuts had to migrate north and ruin everything.  Then they had to migrate east to NV, CO, AZ and beyond to escape the cesspool they created, so they could recreate it.  Bad views travel fast.

BTW, you didn't build that.

Thu, 08/02/2012 - 08:18 | 2671495 goldfish1
goldfish1's picture

Yeah. Great places out west.


Thu, 08/02/2012 - 12:48 | 2672739 Lednbrass
Lednbrass's picture

No different in the East, problem here is all of the plague rats leave places like New England and Ohio then move to the South to destroy new areas by turning them into replicas of the places they left.

Thu, 08/02/2012 - 01:19 | 2671201 mkhs
mkhs's picture

Do you mean nut as in looney tune?

And vegetables as in done a lot of crack?

Thu, 08/02/2012 - 01:29 | 2671209 Freddie
Freddie's picture

I would not eat CA's shit food you moron because it has all been Fukashima'ed.  Get a clue.  Also the little retard invaders from the south who work in the fields sh*t out there and human feces in the food chain is very bad. 

F****ng libtards.

Thu, 08/02/2012 - 08:11 | 2671470 goldfish1
goldfish1's picture

Don't eat it then. Nobody's forcing you. You speak as if you know. California is a big place with lots of growing areas. Have you even been to California? Many migrant workers aren't painted with your smear brush either.

Phliadelphia area had one of the highest readings of contamination in the weeks after the tsunami. You'll probably need to avoid Pennsylvania and all the states in between.

Do you eat seasonal and buy local? Do you know your grower and the agriculture practices on their farm?

I didn't think so.

That picture is so you.

Thu, 08/02/2012 - 10:06 | 2672042 3ringmike
3ringmike's picture

cannabis is california's leading cash crop. just saying.

Wed, 08/01/2012 - 22:09 | 2670949 mendigo
mendigo's picture

Not to worry, there's still Apple.
Commmmonnnn sevens!

Wed, 08/01/2012 - 22:36 | 2671006 ZeroAvatar
ZeroAvatar's picture

Gimme $50 on Snakeyes.   . .

Wed, 08/01/2012 - 21:23 | 2670833 lizzy36
lizzy36's picture

Hard to believe that the state is flat ass insolvent with brilliant "hope and prayer" state budget planning.

Guess they never got that 3 year old saying:don't count your chickens.........

Wed, 08/01/2012 - 22:17 | 2670970 max2205
max2205's picture

Shows that californication education isn't that great. Stanford grads must be Stupid

Wed, 08/01/2012 - 23:10 | 2671071 Melin
Melin's picture

Won't Ben provide e-fiat?  The first gets the most, no?

Wed, 08/01/2012 - 21:24 | 2670838 JLee2027
JLee2027's picture

Market green. Nothing to see here. Nothing to see here. Move along.

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