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EBay has been racing to catch up with Amazon for some time, but now activist investor Elliott Management Corp. is pressuring the company to pick up the pace. 

Elliott, which owns more than 4 percent of the company’s shares and is one of eBay’s largest stakeholders, sent a letter to eBay’s board Tuesday, saying changes are “urgently needed” and suggested a plan to expedite efficiency, free up capital and increase value to investors.  

First step: Shed any nonessential businesses, like the ticket-selling platform StubHub and its classified ads in order to focus on the core marketplace.

“We believe that execution missteps and unclear focus have impaired value,” the letter stated. “Despite its platform value and asset base, eBay as a public company investment has underperformed its peers and the market for a prolonged period of time. This underperformance has been disappointing for both shareholders as well as eBay’s employees, who rely on share-based compensation as a meaningful component of their remuneration.”

The investment firm argued that focusing exclusively on the core marketplace business — that is, selling new goods — would unlock “substantial value” to the company and investors alike.

Apparel has been one area where eBay has been looking to grow its marketplace.

“While surprising to many, only 10 percent of items sold on eBay today are sold via auction, and fewer than 20 percent of items sold are used goods,” the letter said. “Rather than having to decide where to allocate resources — both capital and mindshare — eBay would be free to devote the entirety of its attention to marketplace.”

In addition, Elliott estimated that the classifieds business is worth between $8 billion and $12 billion. StubHub, meanwhile, is likely worth an additional $3.5 billion and $4.5 billion, funds that could be reallocated into growing the business to compete with Amazon. If executed properly, Elliott Management said, eBay’s stock could rise to $55 to $63 a share by 2020.

So far, the news has had a positive impact on eBay’s shares, which rose more than 8 percent to over $33 a piece on Tuesday after news of the letter broke. Still, the stock has fallen about 20 percent in the last year.

Ebay and Amazon have been squaring off for years in the world of commerce. Last October, eBay filed a complaint against Amazon, claiming that Amazon employees had set up fake eBay accounts to lure sellers away from the platform and sell on Amazon instead.

But while eBay is the second largest e-commerce platform outside of China, its market cap is only $32 billion, well below Amazon’s market cap of more than $810 billion.

In the past four quarters, eBay drummed up revenues of $10.22 billion while Amazon reeled in $220.96 billion, according to S&P Capital IQ.

There is no guarantee that streamlining the business would actually increase profits for eBay.

In a statement, an eBay spokesperson responded to Elliott Management’s letter, saying the company values the investor’s insights. 

“We are 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,” the spokesperson said. “Accordingly, we appreciate Elliott’s recognition of the strength and power of eBay’s business and will carefully review and evaluate Elliott’s proposals. We look forward to the opportunity to engage with Elliott, as we do with all shareholders.”