Icahn blasts Netflix after company establishes poison pill

theflyonthewall.com

Netflix (NFLX) earlier today announced that it had adopted a Rights Plan which is being widely described as a poison pill. The term "poison pill" refers to measures taken by a company in order to make itself less attractive to potential acquirers. Netflix's Right Plan, which was adopted without a shareholder vote, gives current shareholders the right to buy more shares if the stake of any individual investor goes over the 10% level. Billionaire investor Carl Icahn, who last week said he had acquired a 9.98% stake in the movie rental company, responded to Netflix's announcement by stating in an SEC filing earlier today that "any poison pill without a shareholder vote is an example of poor shareholder governance." Icahn added that he was particularly troubled by Netflix's plan because of “its remarkably low and discriminatory 10% threshold." Netflix is "undervalued" and may become a takeover target for a large tech company, Icahn had stated last week when he announced that he had amassed a 9.98% stake in the company. In mid-afternoon trading, Netflix added 23c, or 0.30%, to $77.13.

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