Bengaluru — Hedge fund Elliott Management Corp sparked a 12% surge in shares of eBay Inc on Tuesday by urging it to sell or separate off two of its businesses, arguing the e-commerce pioneer could double its market value within two years.

EBay shares, which lost a quarter of their value in 2018, rose 12.2% to $34.78 before the bell and were on course for their best performance in a year in response to the letter from one of the US financial world’s best-known activist investors.

Elliott, which owns a stake of more than 4% in eBay, said the company could raise its value to $55-$63 per share by 2020 if it implemented a five-point plan for restructuring its business.

EBay did not immediately respond to a request for comment.

The fund said the company should separate its ticket-sales franchise StubHub and eBay Classifieds Group from its core marketplace.

It said StubHub on its own could be worth $3.5bn to $4.5bn and eBay Classifieds, which could be sold or spun off, between $8bn and $12bn.

The shareholder also detailed a plan for operational improvement, which it said calls for a roughly $250m increase in operating expenses from 2018 to 2021.

“While we believe that execution missteps and unclear focus have impaired value, eBay is far from broken, and its future should be bright,” Elliott’s Jesse Cohn wrote, adding that his mother had built a successful business on eBay by selling jewellery for over a decade.

The San Jose, California-based company has been splurging on product development, brand marketing and website design, while also cutting jobs, as it battles competition from Amazon.com Inc and other online marketplaces.

Elliott said its plan earmarked 20% of free cash flow on an ongoing basis, or $600m to $700m, for annual investment in acquisitions of companies or technologies.

It called for an initial meeting with the board to discuss its concerns and for the establishment of a Strategy and Operations Committee to execute the improvement plan.