EBay shares surged on Tuesday after an activist investor urged the pioneering e-commerce company to make “substantial and immediate” change to address its “significant underperformance.”

Elliott Management, a hedge fund known for activist campaigns, said in a letter to eBay’s board that change at the company “is urgently needed to address real business issues, which we believe will unlock long-term shareholder value.”

The letter disclosed that Elliott owns a 4% stake in eBay worth about $1.4 billion, making the fund one of its largest investors, and recommended eBay take steps to “unlock strategic value” including a spinoff of its StubHub e-ticket and eBay Classifieds businesses.

“eBay has created something special which very few other businesses can ever hope to replicate,” but as a public company investment, it “has underperformed its peers and the market for a prolonged period of time,” Elliott said.

According to Elliott, eBay’s stock could be worth from $55 per share to more than $63 per share by the end of 2020 if the business was run more efficiently. In trading Tuesday, the shares jumped 6.2% to $32.92.

Elliott said eBay’s underperformance “has been especially pronounced in recent periods,” with its total return on investment being more than 100% lower than that of peers and from 35% to 65% lower than the technology indices.

“As the broader internet universe has flourished, especially e-commerce peers, eBay’s stock has floundered,” the fund said, adding that “the rapid deterioration in [eBay’s] valuation reflects a profound loss of confidence by investors.”

Elliott called its template for a turnaround “Enhancing eBay,” saying a spinoff of Stubhub and eBay Classifieds would enable the company to focus exclusively on improving its core Marketplace business.

In response to Elliott’s overture, eBay said it was “focused on delivering value for our shareholders, customers, and employees by driving the best choice, the most relevance and the most powerful selling platform to deliver growth. Accordingly, we appreciate Elliott’s recognition of the strength and power of eBay’s business and will carefully review and evaluate Elliott’s proposals.”

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