GameStop Tanks on CFO's Departure

NEW YORK (TheStreet) -- GameStop's(GME) stock hit a 52-week low following Wednesday night's announcement that its chief financial officer resigned and is moving to Wal-Mart(WMT).

CFO Catherine Smith will take a position at Wal-Mart's international division. This is the second CFO to resign from the company in six months.

GameStop did not reveal plans for the search for her replacement, but named Robert Lloyd, chief accounting officer, as interim CFO effective immediately.

Separately, Piper Jaffray analyst Anthony Gikas downgraded the video game retailer to neutral from overweight and cut his price target on the stock to $16 from $24, saying the company has little long-term earnings growth prospects.

"Each month it becomes more evident that interactive game sales are shifting from packaged goods to digital," Gikas wrote in a note. "Packaged goods game sales have declined from 85% of category sales to 70% during the past two years. We expect the shift to digital entertainment will continue as the current video-game cycle plateaus and declines during the next three years. We expect industry-wide packaged goods game sales will peak during 2010, and GameStop will experience peak earnings during 2011."

Shares of GameStop are plunging 8.5% to $17.25 in morning trading. Earlier this morning the stock hit a 52-week low of $17.12.

-- Reported by Jeanine Poggi in New York.

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