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The share price of newly debuted Facebook stock is seen at the Nasdaq stock market moments after it went public on May 18, 2012. The company still hasn't seen the share price climb back to IPO levels.
Remember the so-called "Facebook Effect?" That was the tax windfall that California was expected to get as a result of the Facebook IPO creating a legion of overnight millionaires. It was identified back in January.
According the Mercury News, "Gov. Jerry Brown and state lawmakers in June approved a $91 billion budget that included $1.9 billion in expected tax revenue from Facebook employees striking it rich — a rare projection that helped stave off cuts to schools and programs for the sick, poor and disabled."
Now the LAO says that "a big chunk of the extra state revenue" — hundreds of millions — "resulting from the IPO won't materialize" if Facebook's share price doesn't reverse its current downward diving trend (it made a decent start today, ascending more than 8 percent in midday trading, but it's still way below its IPO opening price of $38).