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Carl Icahn's Netflix share sale nets investor tidy $800 million profit

The billionaire investor Carl Icahn has once again hit the jackpot after cashing in big on his shareholdings in Netflix.

Since Icahn bought more than 9 per cent of the video streaming company 14 months ago, Netflix shares have rocketed by 457 per cent. It means that Icahn Enterprises, the holding company that the American businessman founded, is booking profits of between $700 million (£433.8 million) and $800 million (£495.8 million) on the three million shares he sold in the 12 days beginning on 10 October and ending on 22 October.

Icahn’s firm initially acquired Netflix for shares of an average price of $58 (£35.9), but after a mammoth day of selling on 22 October, 2.4 million of his shares in the company were sold at $341.44 (£211.587) for around $819 million (£507.5 million). Broken down, that means that the sale alone generated Icahn a tidy profit of around $645 million (£399.4 million).

Earlier, Netflix shares had plunged more than 9 per cent to $322.53 (£199.88) as rumours spread that Icahn would be reducing his stake.

Yet the announcement of stronger-than-expected results late on Monday (21 October) meant that shares rose by nearly 10 per cent as trade began the following day, and investors scrambled to snatch a piece of the video company that was announced as 2013’s best performer in the S&P 500.

Volume spiked to 27 million shares - several times its normal levels - a sign of hot money leaving the stock.

With the dust settling on Wall Street though, Icahn can still relax with a holding of 4.5 per cent of Netflix, a slashed amount from the 9.4 per cent stake he announced in June but significant nontheless.

That stake, Ichan claims, is largely thanks to his son Brett - the portfolio manager at his father’s holding company who was responsible for the Netflix investment and for maintaining the 9.4 per cent share through a significant rally in the company’s stock.

Regardless of whether father or son was responsible, the success is welcome news to Icahn, whose previous attempts to make money out of the video industry were less than ideal - he bought a stake in Blockbuster back in 2004.

Looking back now, Icahn called it the “worst investment” in his 30-plus year career, with the movie rental business now bankrupt.

Earlier in the year, Ichan's considerable investment in Apple catapulted him into the headlines, with shares in the iconic US company soaring after news of his financial interest surfaced.

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