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ERROR: type should be string, got "https://www.barrons.com/articles/ebay-stock-elliott-activist-stake-51548177884\neBay Stock Is Soaring as Activist Investors Push Change\nNicholas Jasinski\nJan. 22, 2019 12:26 pm ET\nPhotograph by Ki Price/Getty Images\nActivist hedge fund Elliott Management wants to shake things up at eBay and is putting $1.4 billion to work. The fund disclosed a greater than 4% stake in the e-commerce company on Tuesday morning and released an exhaustive letter of recommendations for eBay’s board.\nMore from Barron’s\nServiceNow CEO John Donahoe Wants Clients to Embrace Digital Transformation\nIt Was the Biggest Holiday Season Ever for Online Shopping\nPayPal Has Become Retailers’ Best Ally in the Fight Against Amazon\nElliott, run by Paul Singer, wants eBay (EBAY) to double down on its core Marketplace e-commerce business. That means spinning off other assets including StubHub and eBay’s portfolio of Classifieds properties. The fund’s “Enhancing eBay” plan promises to unlock value to the tune of “$55 to $63+ per share by the end of 2020,” or possibly double eBay’s $31 closing price on Friday. EBay’s shares quickly rose over 10% on Tuesday morning after Elliott’s announcement. They were up 7% as of noon.\nAccording to The Wall Street Journal, Starboard Value—another activist hedge fund—also has a sizable stake in eBay and is seeking some of the same changes as Elliott Management.\nIn a letter, Elliott partner Jesse Cohn begins by reviewing eBay’s history as a public company and highlights the stock’s recent underperformance:\nMost disappointing, however, is that this significant underperformance has occurred despite strong end-market performance. As the broader internet universe has flourished, especially e-commerce peers, eBay’s stock has floundered. This is particularly evident in eBay’s performance relative to its proxy peer group. Over the last five years, eBay has underperformed 13 out of its 15 proxy peers, besting only Symantec and Twitter.\nConsumer appetite for online retail has only grown over the past half-decade, and eBay’s annual sales have increased every year since the company split off from PayPal (PYPL) in 2015. But while investors have rewarded PayPal—up almost 150% since the spinoff—they’ve soured on eBay. As pointed out by Cohn, the company’s stock now trades for just 12 times its next 12 month estimated earnings. That compares with roughly 16 times for the S&P 500 and 18 times for the Nasdaq Composite. “Put in simpler and starker terms, eBay is valued less by investors than many bricks-and-mortar retailers that are not growing at all,” Cohn wrote.\nThe fund suggests that eBay’s classified group, which contains 10 international online classifieds brands including the U.K.’s Gumtree and Canada’s Kijiji, could be worth as much as $12 billion in a sale. Elliott also contends that eBay’s StubHub ticketing platform could be valued closer to $4.5 billion as a stand-alone company.\nSeparating those assets, Elliott argues, would free up management attention and capital to invest in eBay’s Marketplace business, which boasts hundreds of millions of buyers and sellers around the world and close to $100 billion in annual merchandise volume. Cohn called improving execution in eBay’s original business the “single most important driver of its future value” and lamented the fact that eBay seems to have missed out on innovation in the space in recent years. He counts other online marketplaces including Etsy (ETSY), Wayfair (W), OfferUp, and others as succeeding in areas where eBay should have taken the lead.\nEtsy shares are up 169% over the last 12 months.\nElliott is pushing eBay to accelerate growth, while cutting costs through decreasing overhead expense, using more cost-effective forms of marketing, focusing product development on core e-commerce projects, and consolidating expensive office space into fewer locations.\nThe letter also calls for eBay to commit to returning 80% of free cash flow to shareholders beyond 2019 through a 1.5% dividend and the remainder in share repurchases.\n“We hope you agree with our views, and we are looking forward to hearing yours as well. As a next step, we respectfully request a meeting to work together to pursue this opportunity,” Cohn concluded.\nIn a statement, eBay responded that it values shareholders’ input. “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.”\nWrite to Nicholas Jasinski at nicholas.jasinski@barrons.com\nActivist hedge fund Elliott Management wants to shake things up at eBay and is putting $1."