Nov 1, 2012 · 4 minutes

Carl Icahn says he's been trying to reach Netflix CEO Reed Hastings on the phone, but it doesn't sound like Hastings has been taking the call. “Of course, I don't know if anyone will listen to me,” Icahn said in an interview with Bloomberg Wednesday. “Maybe eventually.”

There is something a little sinister about Ichan's self-effacing understatement. Icahn is, after all, a serial shareholder activist who started out as a corporate raider in the 1980s. His first big kill came when he staged a hostile takeover of TWA, once one of the most glamorous brands in the airline industry. Icahn made out well. TWA less so. The company faced multiple bankruptcies and sold off its prized assets to pay for the debt Icahn incurred when he took TWA private.

These days, no one cops to being a corporate raider. Instead, they're called shareholder activists, noble warriors fighting for the good of all shareholders. As an activist, Icahn has developed a taste for technology companies, but he remains something of a corporate virus. Once he gets a good chunk of a company's stock, board members will try to shake him off. If they can't, the company often fares poorly, whether or not Icahn himself makes a profit on his investments.

Icahn's track record in tech is spotty at best. He bought as many as 75 million Yahoo shares and won a seat on the company's board, hoping to sell the company to Microsoft. When that didn't happen, Icahn stepped down and sold off his stake at what looked to be a loss. He had better success at Motorola, buying shares between 2007 and 2010 as the stock slid and finally getting his wish of selling Motorola's wireless business when Google bought it for $12.5 billion last year.

Other battles ended badly for Icahn's activist causes. For several years, he fought for control of networking XO Communications, during which the company posted hundreds of millions in operating losses, the stock price collapsed and other investors sued Icahn. He also tried to turn around Blockbuster as it struggled to find a place in the world of online video. That didn't go so well either. As later declared, “Blockbuster turned out to be the worst investment I ever made” in part because “Netflix created a better business model.”

Maybe it's some kind of crazy revenge scheme, but now Icahn is going after Netflix. A number of funds controlled by Icahn – some with bucolic names like High River LP and Barberry Corp. - bought 5.5 million Netflix shares and options around Sept. 4, when the stock was trading at $55 a share, and again around Oct. 25, when the stock was trading between at $61 a share. The options have a tentative exercise price of $36 a share.

Already, Icahn's Netflix gambit is looking pretty successful. Netflix's stock rose 14 percent Wednesday right after an SEC filing disclosed that Carl Icahn owns 9.98 percent of Netflix. It's going to be a lot harder for Hastings to avoid discussions with someone who owns a tenth of his company. Hastings, by contrast, owns 4.4 percent of Netflix shares, according to a proxy statement the company filed in April.

Icahn stated in his filing that he hasn't decided yet how best to maximize value for shareholders. He said as much again in his interview with Bloomberg, but he coyly telegraphed a likely outcome. The online-video industry is undergoing a “secular change” thanks to tablets and Internet-connected TVs, he said. Fewer movie buffs are going to movie theaters, including Icahn. What's more, bigger companies than Netflix can get 30 million subscribers overnight by buying the company.

In other words, Icahn believes all the pieces are in place for Netflix to be bought out. “Netflix should be consolidated in my opinion,” Icahn said in the interview. “There will be demand for Netflix. There will be buyers who want to buy it, and it's just a question of corporate governance: Do you do want what shareholders want?”

Icahn said he thinks Hastings is a smart guy. Which is to say, he expects him to agree. And listening to Icahn talk, you almost imagine the two sitting down over tea and confections, laughing in delight at how much they agree with each other. In fact, Icahn is an experienced and tenacious bully. And he now appears to be Netflix's largest shareholder.

Left on its own, Netflix would be facing several years of costly expansion, moving into Latin America and Europe and negotiating and re-negotiating content licenses. Investors have been losing patience with that strategy, enough that the company last week traded below its enterprise value as well as its revenue over the past four quarters. The stock had become so cheap that an acquisition seemed the most likely outcome for the company.

Over the past three trading days, Netflix has rallied 32 percent. Not because its prospects have suddenly improved, but for two other reasons. First, rumors on Friday that Microsoft was in talks to buy the company. And now because Icahn disclosed he owns 10 percent of Netflix. For now, investors seem happy to have Icahn on their side. As for Netflix, it has a tough fight on its hands if it wants to stay independent. Sooner or later, Hastings is going to have to pick up that ringing telephone.

[Illustration by Hallie Bateman]