One of Eddie Lampert's most loyal backers is leaving Sears and the stock is tanking

Sears Holdings' largest shareholder just gave up his seat on the company's board. The embattled retailer's stock is plunging on the news.

The company announced on Monday that Bruce Berkowitz is will leave Sears' board of directors, effective October 31. He joined nearly two years ago, in February 2016.

Berkowitz also serves as the Chief Investment Officer of Fairholme Capital Management, which is the second largest holder of Sears shares and one of the last to hold out as the company struggles for a turnaround.

Fairholme has lost 89% of its assets since its peak in 2011 as of June, according to the Wall Street Journal, in part as Sears shares have plunged as it has shuttered stores, fired staff, and warned investors that it may not be able to remain in business long-term.

Berkowitz has remained one of Sears chairman and CEO Eddie Lampert's stalwart backers through the company's tumultuous times, and Berkowitz supported Lampert's plan to spin off valuable Sears assets like real estate and the company's Craftsman brand. Craftsman sold earlier this year for $900 million to Stanley Black & Decker, which provided a sizable bump to the company's bottom line for the year.

"I wish the company and its associates all the best as Sears Holdings continues to execute on its strategic priorities," Berkowitz said in prepared remarks. He did not give a reason for why he was stepping down.

Sears' stock is down nearly 9% in early trading Monday, and are down over 90% since Fairholm first became a shareholder in late 2005.