The new Netflix logo.

In 2012, famed investor Carl Icahn bought shares of Netflix (NASDAQ:NFLX) at the urging of his son, Brett. At the time, Netflix stock was worth about $58 per share. Investors who followed Icahn into the trade have been richly rewarded: the stock is up 725% since then.

But now that Icahn is selling shares, it begs the question: Is it time for you to get out, too?

A wager between father and son
A few months ago, Icahn sold 480,000 shares of Netflix. But this actually isn't the first time Icahn has shed shares. At the end of 2013, his firm sold almost 2.9 million shares -- half of its total -- for a profit of roughly $800 million.

On the face of it, that sounds like an incredible trade -- maybe one of the best ever in such a short time frame. But Brett and his business partner disagreed with the move. In fact, they so vehemently disagreed that they put an incentive plan in place where they would be rewarded if the Netflix stake continued to increase between then and 2016.

So far, the younger Icahn is winning the bet. Netflix now sits roughly 45% higher than it did when Carl made his first sale. So investors should be well aware that while Icahn continues to sell some of his shares, some of the biggest decision-makers in his fund think owning shares is still a good idea.

Source: Insider Monkey via Flickr.

In fact, back in 2013, Carl himself stated that he essentially agreed with much of what his son had to say, but thought it was prudent to take some of the chips off of the table.

Digging deeper into the most recent sale
Sometime between April 1 and June 30 of this year, Icahn Enterprises (NASDAQ:IEP) sold 480,000 shares of Netflix. Overall, that sale could have been worth as much as $215 million. But if we look at the bigger picture, investors should take this move with a grain of salt.

Number of shares in millions on y-axis. Source: Whale Wisdom.

As it stands right now, Icahn Enterprises still owns almost 1.8 million shares of Netflix worth close to $850 million. To put that in perspective, that's the group's 13th largest position, and it accounts for just over 2% of all holdings.

So should you sell your Netflix stock?
There's no denying that Netflix shares are expensive when using traditional metrics. While many people think the S&P 500 is overpriced as it currently sells for 20 times earnings, Netflix's valuation is downright stratospheric at over 140 times earnings (on a non-GAAP basis).

That being said, much of the company's high price tag has to do with two things. First, it is investing heavily in both original content and international expansion. The expenses for international expansion take a huge bite out of earnings, but they aren't an expense that will continue indefinitely.

The second big factor is simply the belief that Netflix will become more and more important in distributing content for years to come. That's a tough thing to forecast, but based on how the company has grown its subscriber base over the past five years, it's hard to argue that's not a possibility.

All figures as of Q2 in each given year. Subscribers in millions. Total subscribers does not include domestic DVD numbers. Source: SEC filings

Netflix is certainly investment worthy, but folks should be well aware of the heavy expectations baked into the stock price before making major purchases.