Icahn Takes a Bow as Big Winner in Netflix Trade

Icahn Takes a Bow as Big Winner in Netflix Trade

Netflix‘s stock may have taken a roller-coaster ride on Tuesday, but Carl C. Icahn is grinning all the same

The veteran activist investor is sitting on enormous paper profits from his investment in the video service, just under a year after he first disclosed a nearly 10 percent stake in the company.

How big? As of Tuesday afternoon, Mr. Icahn had reaped a roughly 465 percent return on his initial investment.

Even if a negative analyst note from Bank of America Merrill Lynch has taken some of the bounce out of Netflix’s stock — after the company’s latest quarterly reports propelled a big price jump in after-hours trading.

Mr. Icahn announced last fall that he had acquired about 5.54 million shares in Netflix for an average price of about $ 58 each. At the time, the investor called the company undervalued and speculated that a sale of the video service may make sense.

That was before Netflix rolled out original series like “House of Cards” and “Orange Is the New Black,” which helped the company top milestone after milestone. On Monday, executives proudly declared that the video service had reached 40 million subscribers worldwide.

The euphoria over Netflix’s prospects has provided a rocket-like boost to the company’s stock price. Even after the impact of the Bank of America note, which questioned whether the service’s valuation was sustainable, shares traded on Tuesday afternoon at $ 327.75.

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