Hestia Capital Partners LP has a 6.9% stake in Pitney Bowes and is pushing the company to re-evaluate its capital allocation and ecommerce strategy, according to Reuters.
Hestia Capital Partners LP, which scored big gains on its GameStop (GME.N) bet, is pushing shipping and mailing company Pitney Bowes Inc (PBI.N) to re-evaluate its capital allocation and e-commerce strategy, sources familiar with the matter said.
The hedge fund, which owns a 6.9% stake in the company that leases postal meters and pre-sorts mail for commercial clients, has held talks with Pitney Bowes and has suggested a possible sale of an underperforming segment, two people with direct knowledge of the matter told Reuters...
...Wolf believes Pitney Bowes' stock price, which closed at $3.61 on Friday, is trading between 70% and 80% below what its divisions would be worth on a standalone basis, the sources said. In early trading on Monday, it climbed higher before wiping away gains at a time the broader market is down...
...Wolf has suggested that the board consider selling the Global Ecommerce segment if its results do not improve, the sources said. He has also proposed the company create a board committee focused on capital allocation and strategic planning, like the one he served on at GameStop with Cohen.
Wolf believes Pitney Bowes should focus on cash-generating segments like Presort Services, its mail aggregation business, and SendTech Solutions, its postage meter business. Both have market leading positions and opportunities to grow and increase profits, Wolf has told the company, according to the sources.
Selling off the ecommerce side of the business could have massive ripples across the industry, especially at eBay where Pitney Bowes just announced a renewed partnership to power cross border logistics and support the recently unveiled eBay International Shipping program that will be rolling out over the next year.
I'll definitely be keeping an eye on this story as it develops - stay tuned!