- Carl Icahn missed out on more than $40 billion of gains on Apple and Netflix stock.
- The investor bet big on Netflix in 2012 and Apple in 2013, but cashed out a few years later.
- Icahn described both wagers as “no-brainers” but left huge amounts of money on the table.
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The billionaire investor and Icahn Enterprises chairman first bought Netflix stock in the third quarter of 2012, and quickly amassed as many as 38.5 million shares, adjusted for the video-streaming platform’s 7-for-1 stock split in 2015.
“Netflix was a no-brainer when we first went into it,” Icahn told CNBC in June 2015, citing the company’s huge war chest.
Icahn’s roughly 9% stake in Netflix rose in value to over $1.7 billion by late 2013. However, the investor steadily reduced it over the next few quarters, and exited the holding entirely in the second quarter of 2015.
“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% in only 14 months, it is time to take some of the chips off the table,” he explained in a Securities and Exchange Commission filing at the time.
Still, he might regret the move today. Netflix’s stock price has skyrocketed more than 10-fold since Icahn’s exit, and closed at a record $613 last Friday. At its peak, the investor’s stake would be worth about $24 billion today.
Icahn made a similar bet on Apple. He first invested in the iPhone maker in the third quarter of 2013, and built his stake to 211 million shares by mid-2014, adjusted for the 4-for-1 stock split last year. The position grew in value to about $6.6 billion by mid-2015.
Regardless, Icahn exited the position in early 2016, citing concerns about demand in China. Apple’s stock price has surged more than five-fold since then, meaning if the investor hadn’t sold, he could be sitting on a stake worth up to $30 billion today.
It’s worth emphasizing that Icahn made a few billion dollars of profit on his Netflix and Apple bets. However, his combined stakes in the two companies would be worth more than $50 billion today if he hadn’t cashed out. That includes well over $40 billion in unrealized gains, all other things being equal.