Software giant Microsoft (NASDAQ:MSFT) should replace Steve Ballmer as its Chief Executive, Greenlight Capital Inc. President David Einhorn said at the Ira Sohn Investment Conference in New York.

His continued presence is the biggest overhang for Microsoft stock. It's time for Microsoft's board to tell Steve Ballmer, 'All right, we see what you can do, let's give so-and-so a chance', Einhorn said at the conference yesterday.

Ballmer has come under pressure from investors as shares of Microsoft have underperformed consistently since Ballmer took the helm in 2000. Microsoft shares have dropped 13 percent this year.

Ballmer was also criticized for losing market share to Apple and Google in smartphone space and paying $8.5 billion to Skype. Meanwhile, Apple's iPad and other Android tablets are cannibalizing PC's that are running on Windows.

Ballmer owns about 4 percent of Microsoft stock, next only to Bill Gates who owns about 7 percent shares in Microsoft.

However, Einhorn recommended buying Microsoft shares as it trades at a discount to the Standard & Poor's 500 Index and the market is under appreciating the potential of Microsoft.

Einhorn, whose Greenlight Capital manages over $7 billion of assets as of Jan. 1, rose to fame for making a prophetic call on Lehman Brothers' accounting troubles ahead of bank's collapse in September 2008.

Shares of Microsoft ended Wednesday's regular trading session at $24.19, up 4 cents, on Nasdaq. In the extended trading session, the stock gained another 12 cents to reach $24.31.