The following is an excerpt from MERRILL GOOZNER | May 25, 2012 | The Fiscal Times |
There’s no shortage of losers in the Facebook IPO: Mutual funds that didn’t get the insider tip about the company’s sliding prospects; starry-eyed individual investors who jumped at the chance to buy shares above $40 in the first few frothy hours of trading; and the reputation of the investment banking industry, which gave the general public one more reason to believe the stock market is nothing more than a rigged casino favoring the house – their house.
But after searching high and low, we’ve finally turned up two big winners from Facebook going public: the U.S. Treasury and the state where Facebook executives and key employees reside – California. Those governments will reap an estimated $4.6 billion in income taxes due from insiders who received over 400 million shares of stock as part of Facebook’s 2005 equity compensation plan. Stock distributed under such plans is taxed as ordinary income.
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