Icahn's Bullish Case for Netflix
Nov 3rd 2012 12:22PM
Updated Nov 3rd 2012 12:26PM
The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics around the investing world.
Netflix shares are up on the news that Carl Icahn has purchased a 10% stake in the company. What a pleasant surprise! According to the filing, Icahn believes Netflix is attractive because of its "dominant market position and international growth prospects." DISH Network's decision to give up on building Blockbuster into a Netflix killer shows Netflix's strength. The filing also says Netflix may hold "significant strategic value," meaning that someone might want to buy it. Some rumors have been making the rounds. There was speculation that Verizon would be a buyer. Instead, that company struck a deal with Coinstar. There was also a rumor that Microsoft might want to buy Netflix.
John and David own shares of Netflix in their real-money portfolio and might be looking to increase their stake in the company. That's because they see the benefits of it growing its streaming service. Netflix has a mountain of viewing data and a management team that knows how to use it to run the business. What's more, as the streaming service scales, it starts to become very valuable in the future, which is why investors should follow Icahn into Netflix.
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The article Icahn's Bullish Case for Netflix originally appeared on Fool.com.David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Verizon Communications. The Motley Fool owns shares of Microsoft and Netflix. Motley Fool newsletter services recommend Microsoft and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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