Facebook IPO May Be Worth $2.45 Billion to the State of California
You know who is happy about Facebook's IPO, aside from its investors and fanboys? The state of California. The Golden State has been plagued by bad news about its budget, but a new estimate from the state of California's Legislative Analyst's Office suggests that the Palo Alto company's move to public markets could drop an extra $2.5 billion into the state's coffers, including a whopping $1.5 billion in 2012-2013.
The LAO made sure to caveat its estimate with all detailed notations of the uncertainties in their model. "As we discussed in the Overview of the Governor's Budget, the Facebook impact on state revenues cannot be predicted in advance and will never be known retrospectively with any degree of precision," they wrote. "Yet, given that an IPO clearly would benefit state revenues, we believe it is appropriate for policymakers to incorporate this into their budgetary discussions."
Even if it will be hard to quantify the impact of a Facebook IPO, the bottom line is clear to the LAO: Facebook going public will be great for a state that needs to close a multi-billion dollar budget gap over the next couple of years.