This Tuesday June 23, the video streaming company Netflix (NASDAQ: NFLX) announced its approval of a 7 for 1 split of its stock, sending the stock price to rise up to about $695 at the opening of Wednesday, June 24, and shortly after, Netflix touched a new 52-week high price of $706.24.
However, shortly after opening hours on Wednesday June 24, billionaire investor Carl Icahn announced on Twitter (NYSE: TWTR), “Sold last of our $NFLX today. Believe $AAPL currently represents same opportunity we stated NFLX offered several years ago.”
Icahn’s withdrawal of about 1.4 million shares from Netflix quickly plummeted the stock value by about $19, leaving Netflix at about $687.
Citigroup downgrades Netflix to neutral
This morning, Citigroup (NYSE: C) downgraded Netflix to neutral. Citi Internet analyst Mark May was able to comment on their rationale on their decision.
Netflix’s value has increased by fifty percent since the stock has been upgraded back in April, hitting the price objective of below the seven hundreds. Mark May mentions that this is “fully valuing” all of the countries that Netflix has already launched into, and they are “stepping aside into the sidelines, taking profits, and they feel at this level, the valuation is fully reflecting the positive trends that the business is seeing.
Still likes Netflix, but hesitant to give full value
Mark May mentions that Citi has published some upside scenarios that would get Netflix to over a $950 value, but in order to do so, they would need to start giving them credit or value for countries that they would likely launch in the future, examples being Korea, China, and India. He also mentions that due to the traction within the more recent markets that they have entered (Germany, France), Citi is hesitant to be “aggressive” and ready to give Netflix the full value at this point.
As of 3 PM today, the stock continues to decline at about $660, while opening at about $678 this morning.