Carl Icahn Exits Netflix, Inc. (NASDAQ:NFLX) After Amassing Over $1.9 billion In 3 Years

The Netflix company logo is seen at Netflix headquarters in Los Gatos, CA on Wednesday, April 13, 2011. AFP PHOTO / Ryan Anson

After making a fortune, Carl Icahn exited Netflix, Inc. (NASDAQ:NFLX), which suggests that one of the lucrative trades that market witnessed is over and done with. He bought a 10% stake in the Netflix back in 2012 for just $58 per share as he expected that the company was about to be bought.

However, it didn’t happen, and on the request of his son Brett Icahn, and analyst Dan Schechter, Mr. Icahn decided to stay invested in the trade. The decision proved right as Netflix stock jumped over 1,000% in last three years. As per FORBES’ estimate, Icahn made over $1.9 billion from his investment of $321 million in the company.

The hits and miss

Icahn sold nearly half of its Netflix’s stake in 2013 as he believed that when a person should book profits when he is lucky and/or smart enough to get a 457% return in just 14 months. If he has not done that, the initial investment of $321 million would have fetched him profit of $3.8 billion. Due to net neutrality concerns, he was conservative about company.

Netflix stock made an all-time high after the company reported 7-1 stock split on Tuesday. However, Mr. Icahn sold his entire stake stating that there is increasingly strong competition in the movie and TV streaming service.

The new investment

After making a fortune with Netflix, Inc. (NASDAQ:NFLX), Icahn expects to achieve the same success with his investment in Apple Inc. (NASDAQ:AAPL). As of March 31, his fund comprises nearly 53 million shares of Apple stock, worth $6.6 billion. He believes that Apple currently provides same opportunity that Netflix offered in 2012.

During his announcement, Icahn also highlighted his views on the current state of the market. He said that as of now, the market is overheated, particularly high yield bonds. He further tweeted that if more esteemed investors had cautioned about the market in 2007, everyone might have avoided the financial crisis in 2008.

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