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What Icahn's Stake in Netflix Means to Investors

By Blake Bos and Andrew Tonner - Nov 1, 2012 at 9:13PM

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A method to Icahn's madness.

The man, the legend, Carl Icahn revealed a substantial 10% stake in Netflix (NFLX 4.15%) this week. Though Icahn has not been successful with similar companies in the past (ex: Blockbuster), there may be a method to his madness after all.

Even though Netflix has fallen from its previously lofty valuation of around $300 a share, it's risen more than 40% since early August, and rewarded recent shareholders handsomely. 

However, the real question is whether these gains can continue. With direct competition such as, Amazon (AMZN 2.57%), Google (GOOGL -0.16%), and Microsoft (MSFT 1.12%) Netflix's growth will only be more difficult in the future.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$187.83 (4.15%) $7.49
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$262.52 (1.12%) $2.90
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,116.10 (-0.16%) $-3.30
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$2,135.50 (2.57%) $53.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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