(Reuters) - Shares of U.S. toymaker Mattel Inc sank 7 percent on Friday as the appointment of a fourth chief executive in three years left investors with little faith that the maker of Barbie and Hot Wheels was any nearer a recovery.

Chief Executive Officer Margaret Georgiadis' announcement of her departure on Thursday came after just 14 months at the helm that has seen the company's share price cut in half. She was formerly at Alphabet Inc.

Analysts said her replacement, digital media executive Ynon Kreiz, has little room to manoeuvre as he seeks to deal with a changing toy market that has hurt traditional producers and bankrupted the biggest brick-and-mortar retailer Toys 'R' Us.

A 7.2 percent drop in early trade on Friday took Mattel shares to a more than nine-year low of $12.21.

"This (departure) may imply that the business is struggling to the degree she feels it impossible to turn around and the options are running thin," said Stephanie Wissink, an analyst with broker Jefferies.

"Fundamentals continue to be weak, recovery prospects are strained by capital constraints and brand fatigue, and TRU (Toys 'R' Us) events are disruptive."

Wissink and others raised the prospect of Mattel selling off parts of its business in response.

Some, however, argued Kreiz, who comes from digital media and content company Market Studios and has also served with TV company Endemol, has the right background to modernize the toymaker.

"We think this deep network of digital and content connections will keep Mattel on its trajectory to building its power brands into connected 360 degree play experiences globally," Morningstar analyst Jaime Katz said.

(Reporting by Nivedita Balu and Siddharth Cavale in Bengaluru; Editing Patrick Graham)