Netflix Stock Splits, Carl Icahn Sells
Whoever said it is not possible to make billions of dollars in a day has certainly not met Carl Icahn. This is exactly what happened to him in one trading day as he decided to sell the last of his Netflix holdings, MarketWatch has learned. In doing so, the billionaire investor turned his initial 2012 Netflix stake of $321 million into a cool $2 billion, Forbes reports.
However, Forbes also reports that Icahn could have gotten more had he not sold 2.989 million of his Netflix shares back in 2013. Moreover, Forbes estimates Icahn could have easily made about $3.8 billion had he unloaded all his shares in one go. Although if his previous conversation with Forbes was any indication, he would be just as happy with his $2 billion recent earning. Of the sale he did in 2013, he tells Forbes, “I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table.”
Carl Icahn actually announced his stock unloading on Twitter and even offered insight as to a golden opportunity that lies with Apple Inc.’s stock, similar to Netflix years ago. MarketWatch reports that Apple’s stock went up by 1.8% in the morning trade.
Meanwhile, Netflix had actually announced that its board approved of a 7-for-1 split before Carl Icahn unloaded his shares, MarketWatch has also learned. In its latest financial release, Netflix said that said split will be “effected in the form of a stock dividend of six additional shares of common stock for each outstanding share of common stock.”
Furthermore, according to INVESTOPEDIA, “A stock split can also result in a stock price increase following the decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company’s share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices”
In the case of Netflix, MarketWatch reports that the Netflix stock was up by at least 1.8% following the announcement. Moreover, chief executive of Sundial Capital Research Jason Goepfert has also told MarketWatch that a stock’s gain is more generally related to a news of a split, rather than a split itself.
Meanwhile, Netflix also announced, “The stock dividend will be payable on July 14, 2015 to stockholders of record at the close of business on July 2, 2015.” Furthermore, it adds, “Netflix stock will begin trading regular way at the post-split price on July 15, 2015.”
Netflix currently serves 62 million members located in 50 countries. It reportedly provides 100 million hours of television and movies per day.