Dice Holdings declines on Wachovia downgrade

Shares of Dice Holdings Inc. fell sharply on Thursday after a Wachovia Capital Markets analyst downgraded the online recruiting and career development company, foreseeing a downturn at its financial careers Web site.

Shares lost 64 cents, or 8 percent, to close at $7.35.

John Janedis cut Dice to "Market Perform" from "Outperform" in a note to investors early Thursday, citing concerns over the performance of its eFinancialCareers.com site.

According to his survey of postings, eFinancial is already seeing weaker postings year-over-year in its European markets, which accounted for a majority of its postings in the second quarter of 2007, he said.

In addition, Janedis said, the recent round of downsizing in the financial sector _ likely to accelerate in the next 6 to 12 months _ could result in a "materially smaller" industry for the foreseeable future, weakening spending for recruitment advertising by financial services firms.

Furthermore, eFinancial relies less on a subscrition-based model than the company's flagship site, Dice.com, Janedis said, making it more vulnerable to economic weakness. Dice.com provides career services for technology professionals.

A Dice Holdings representative could not immediately be reached for comment on Thursday.

The analyst cut his revenue and earnings estimates for 2009 for the New York-based company.

Shares of Dice are unchanged year-to-date, but have fluctuated between $5.80 and $14.98 in the last 52 weeks.