The following is an excerpt from NATHALIE TADENA | October 31, 2012 | WSJ.com |
Activist investor Carl Icahn and affiliates reported a nearly 10% stake in Netflix Inc., NFLX +15.85% noting the movie rental company’s shares are undervalued due to its dominant market position and international growth prospects.
In a regulatory filing, Mr. Icahn reported a 9.98% beneficial stake in the company, including shares underlying call options, and said Netflix “may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry.”
Mr. Icahn said his investor group is considering ways for the company to maximize shareholder value and may seek to have discussions with Netflix in the future.
A representative from Netflix wasn’t immediately available to comment.
Shares were halted briefly Wednesday afternoon and recently resumed trading, jumping 18% to $82.30. The stock is up 45% over the past three months.
Netflix is facing a raft of competition in its core U.S. streaming business from online video sites, cable television and other streaming services, notably Amazon.com Inc., AMZN -2.38% which has been expanding its offerings as part of its $79 Prime membership.
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