Icahn sells a bunch of Netflix shares, still thinks company is undervalued

Activist investor Carl Icahn just unloaded a whole bunch of Netflix (s NFLX) shares, cashing in on the company’s soaring stock price. Icahn, who bought 4.5 percent of Netflix’s stock when it was valued at just $58, sold about half of his holdings in the company Tuesday. Netflix stock spiked at $389.16 earlier in the day after the company released positive Q3 results Monday, and remained at $322.52 when the markets closed.

Here’s part of Icahn’s statement, via Deadline.com:

“As a hardened veteran of seven bear markets I have learned that when you are lucky and/or smart enough to have made a total return of 457 percent in only 14 months it is time to take some of the chips off the table. I want to thank Reed Hastings, Ted Sarandos and the rest of the Netflix team for a job well done. And last but not least, I wish to thank Kevin Spacey.”

It’s worth noting, though, that Icahn is holding onto roughly three million shares, and his senior investment analyst David Schechter explained the reasoning behind not selling everything this way:

“Despite its notable appreciation in just over one year to $323 per share, for the reasons set forth below, we believe the company remains significantly undervalued. As a subscription service priced at only $7.99 per month, we believe Netflix is one of the great consumer bargains of our time. We find it difficult to understand why a household would not subscribe to the service, considering the low monthly price, the robust content aggregation (which includes an increasing mix of premium and award-winning original series) and the dramatically superior user experience from both an interface and overall technology perspective.”

Schechter went on to say that he expects Netflix to double its U.S. subscriber base over the next few years, adding: “While the domestic growth story alone is compelling, we believe the international opportunity is even larger in the long term.” Those remarks echo comments made by Netflix CEO Reed Hastings in the company’s Q3 results call, during which Hastings said that Netflix could eventually make up to 80 percent of its money abroad.

For Netflix, Icahn’s half-exit is another boost of confidence after a strong 12-month recovery. When Icahn invested in the company a year ago, he raised the possibility of management changes and even a sale. All of that seems to be off the table now, as Icahn has tuned from an activist investor into a House of Cards fanboy.