Tech Stocks: Techs slip as RIM falls; Facebook rises

SAN FRANCISCO (MarketWatch) � Technology stocks were mostly in the red Wednesday, as shares of Facebook Inc. dipped below $28 as the social networking giant�s stock continued to struggle after its initial public offering.

Facebook FB �shed 2.3% to close at $28.19, after hitting a new low of $27.86, below an early IPO price range.

The stock had priced at $38 before its May 18 IPO, the high end of its final proposed range of $34 to $38. The price range was raised from $28 to $35 days before Facebook�s public trading debut.

�Institutions don�t like to buy stocks on the way down, and retail investors don�t have a lot to base an investment decision on,� Wedbush analyst Michael Pachter said in emailed comments. �The stock will work when there is widely disseminated research and when the company starts showing its alignment with shareholders.�

Shares of Research In Motion RIMM �also tumbled 8% to close at $10.35 as Wall Street reacted to the mobile device maker�s grim outlook.

Late Tuesday, Chief Executive Thorsten Heins warned that the BlackBerry maker�s �financial performance will continue to be challenging for the next few quarters.�

The company also said it has hired JP Morgan and RBC Capital to help review its strategies.

�This is not a transition. This is a sharp downward slide,� BGC Partners analyst Colin Gillis said in a note.

Click to Play Facebook falls under $30 per share

U.S. stock futures fell as increased worries about the health of Spanish banks unnerved investors, while Facebook's woes continue.

RIM�s stock slide set the tone for a sector-wide decline which saw the Nasdaq Composite Index RIMM �fall 34 points, or 1.2%, to close at 2,837. The Morgan Stanley High Tech 35 Index MSH �was down 1.7%, while the Philadelphia Semiconductor Index SOX �shed 2%.

Other major tech issues were in the red, including Cisco Systems CSCO �, Advanced Micro Devices AMD �and Hewlett-Packard.HPQ �

Aside from Facebook, other social media shares posted losses. Groupon Inc GRPN �lost 6% to close at $11.10, while Yelp Inc YELP �shed 3% to close at $16.61. Zynga Inc ZNGA �slipped 4% to close at $5.87.

LinkedIn LNKD �was also off 2%, closing at $98.13. The stock had posted gains earlier in the session after Citigroup upgraded the stock to buy from neutral.

�LinkedIn has so far demonstrated strong execution,� analyst Mark Mahaney said in a note. �Through four quarters as a public company (and several years as a company), LinkedIn has delivered consistent and impressive results.�

Shares of Salesforce.com CRM �also fell 3% to close at $140.95.

On Tuesday, AllThingsD reported that the software company was close to signing a deal to acquire Buddy Media, which helps companies manage their brands on social media.

In a note, JMP Securities analyst Patrick Walravens maintained his market outperform rating on Salesforce.com, saying the reported deal valued at �more than $800 million� �would be quite expensive.�

But he added that �Salesforce.com�s investment in social so far has reaped tremendous benefits as the company uses its �social enterprise� message to engage with key decision makers and to drive much bigger deals.�