Icahn Sells Portion of Netflix Stakes – Wins Big

Reuters is reporting that billionaire activist investor, Carl Icahn has sold a portion of his Netflix NFLX stake netting him between $700 and $800 million.

Icahn bought a nine percent stake in the company in August of 2012 at an average price of $58 per share. He sold three million shares from October 10 to October 22 for around $341 per share for a gain of 457 percent. Icahn, who owns and runs Icahn Enterprises IEP, still owns a 4.5 percent stake in Netflix—down from 9.4 percent in June.

Icahn Enterprises has assets of about $29 million and owns stakes in CVR Energy CVI, Forest Labs FRX, Chesapeake Energy CHK, and his very public position in Apple AAPL. Icahn often takes an activist approach but as Netflix quickly began reporting strong financial results, Icahn sat back and did nothing.

Related: Carl Icahn’s Top Six Positions

He said in a tweet:

Sold block of NFLX today. Wish to thank Reed Hastings, Ted Sarandos, NFLX team, and last but not least Kevin Spacey: http://t.co/BRWpKOBfD2

— Carl Icahn (@Carl_C_Icahn) October 22, 2013

In numerous interviews, Icahn gave his son, Brett credit for not selling too early. He has said that he disagreed with his son and wanted to sell the stock earlier in 2013 but his son wanted to hold the entire position resulting in significant gains. In 2012 alone, the stock is up 250 percent event after Tuesday’s nine percent drop on the day.

Tuesday, Netflix reported revenue of $1.11 billion and EPS of 52 cents—both better than expected numbers that sent the stock up 10 percent after hours. It opened up more than nine percent Tuesday but by 11:00 in New York, shares had lost all gains and plunged to the lows on heavy volume. Investors noticed heavy volume indicating institutions and other large investors dumping shares.

Like Tesla TSLA, the stock is seen as overvalued. At 113 times earnings, the stock is more expensive than others in the space that average about 16 times earnings. This hasn’t stopped analysts from continually upping their price targets. Short interest in the stock is about 15 percent as of September 30.

Disclosure: At the time of this writing, Tim Parker was long Apple.