Icahn Sells 2.99 Million Shares of Netflix After Surge

October 24, 2013 Leave a comment

Icahn Sells 2.99 Million Shares of Netflix After Surge

Billionaire Carl Icahn said he sold 2.99 million shares of Netflix Inc. (NFLX), citing a 457 percent rise in the stock since his original investment in November 2012. The shares fell in extended trading. Following the sale, Icahn, 77, still holds 2.67 million shares, or a 4.5 percent stake in Los Gatos, California-based Netflix, according to a regulatory filing today. The investor said his cost for the stock was $58 a share, suggesting a gain of almost $800 million from the sales.Icahn’s sale of 2.4 million shares today contributed to a 9.2 percent drop in Netflix. The stock soared to a record $396.98 yesterday after the company, the largest online video-subscription service, reported third-quarter results that beat analysts’ estimates. Icahn’s son, Brett, and fellow portfolio manager David Schechter, said it’s still a bargain.

“Despite its notable appreciation in just over one year to $323 per share, for the reasons set forth below, we believe the company remains significantly undervalued,” Icahn and Schechter said in a statement. “As a subscription service priced at only $7.99 per month, we believe Netflix is one of the great consumer bargains of our time.”

Netflix fell 2 percent to $316 in extended trading after closing at $322.52 at 4 p.m. in New York. The stock has now retreated 20 percent in the 24 hours since the company reported third-quarter results.

The sales by Icahn, which began on Oct. 10, could lead others to sell as well, according to Michael Pachter, an analyst at Wedbush Securities in Los Angeles, who has an underperform rating on the stock.

“It’s entirely appropriate for someone who’s up 500 percent to trim their position,” Pachter said. “With all that said, that doesn’t mean that others aren’t going to panic and sell their stock.”

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

Filed under Investing Process, TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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