Billionaire Carl Icahn sold 2.99 million Netflix shares, citing a 457 percent increase in the stock since his original investment.
Icahn continues to hold a 4.5 percent stake in Netflix, according to a regulatory filing.
The sale put more pressure on the shares, which had dropped throughout the day in a flurry of selling that bore the hallmark of momentum traders getting out of the high-flying stock. Netflix shares fell 2.5 percent in after-hours trading to $314.35.
After rising nearly 10 percent at the open, Netflix, the year’s best performer in the S&P 500 index — up 282 percent — was met with immediate selling that picked up once shares turned lower. Volume spiked as shares fell, a sign of hot money leaving the stock.
“Being such a big momentum trader-oriented name, I think people were very quick to capitalize on the pullback from the morning’s highs,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Netflix closed down 9 percent at $322.52 Tuesday after rising as high as $389.16, the highest price since the company went public in 2002. More than 22 million shares changed hands, several times the stock’s 50-day average volume and the most since late January.