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As Facebook stock is un-friended, California fears it’s about to be even more broke than initially thought

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By Doug Powers  •  August 2, 2012 04:58 PM

**Written by Doug Powers

California’s tax revenue predictions from Facebook might end up being an object lesson in “don’t count your chickens until they accept your friend request”:

With shares of Facebook hitting new record lows, the state of California might be more concerned than most.

The social network’s declining stock price could cost the Golden State “hundreds of millions of dollars” in revenue not received from taxes on capital gains, according to a report from the state’s Legislative Analysts’s Office.

The report said the most populous U.S. state’s $91.3 billion budget, approved in June, depended on $1.9 billion in income-tax revenue from company insiders such as CEO Mark Zuckerberg. California had expected Zuckerberg and others to exercise options at a share price of $35.

Facebook’s share price hasn’t closed above its $38 IPO price since its first trading day on May 18. On Thursday, Facebook’s shares sank 3 percent to hit another record low of just above $20. They are now down 47 percent from their public trading debut in May.

Heaven forbid California’s politicians should consider cancelling construction of the train to Farmville though.

Facebook closed at $20 today, and this certainly won’t help matters in the immediate future:

Facebook’s share price dipped below $20 on Thursday after reporting slowing growth and an admission of an alarming number of fake accounts.

In a quarterly filing with the Securities and Exchange Commission, the social media company said that as many as 83 million of its accounts are fake.

It also reported that as many as five percent of its active users have duplicate accounts.

Facebook members grew to 955 million this year.

It says 1.5 percent of its accounts are likely spam or accounts set up for other malicious activity. The fake accounts are concentrated in developing markets, according to the filing.

It also blames people who set up accounts for non-human entities, such as pets.

There are “inherent challenges” in measuring usage,” the social network said.

Wouldn’t you think Facebook would have been forced to nail down this kind of information before the IPO? Or did they but their data was “inaccurate”?

I’m off now to tell my dog to “like” this post on his Facebook account. Help is on the way, Governor Brown!

**Written by Doug Powers

Twitter @ThePowersThatBe

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