What happened

Shares of Pitney Bowes (PBI 1.98%) fell more than 12% on Wednesday afternoon after the shipping and postal services company disclosed in a regulatory filing that director Roger Fradin had stepped down from the board. Fradin built his career as a mergers and acquisitions (M&A) specialist, and it appears some investors are taking the move as a sign Pitney Bowes won't be doing deals or finding a buyer anytime soon.

So what

Fradin is the onetime CEO of Honeywell International's automation and control division and is the current chairman of Honeywell spinoff Resideo Technologies. He is also the former vice chairman of Honeywell, where he was responsible for the company's M&A strategy.

An investor reacts in dismay to a falling stock chart.

Image source: Getty Images.

Pitney Bowes has dabbled in dealmaking. In August, it sold its software solutions business to Syncsort for $700 million. The company has been trying to move away from its traditional business of mail metering and production mailing, which was lucrative but diminishing, and toward e-commerce shipping. But that transition has been painful, with shares down 80% over the past five years and trailing the S&P 500 by more than 40 percentage points year to date.

The company said that Fradin's resignation "is not due to any disagreement with the company." But it is possible that either he or management believes his expertise can be best used elsewhere.

Now what

The long-term challenge for Pitney Bowes is that even if the pivot to e-commerce is the right move, it is a crowded business that will almost certainly have lower margins than the legacy business enjoyed. That's a challenge that is bigger than any one director, and it continues to weigh on the stock price.