Split data show Icahn smart to sell Netflix

Carl Icahn
David Grogan | CNBC

Carl Icahn is the smart money once again.

Netflix shares were soaring at the start of trading Wednesday as traders cheered a decision by the company to split its stock 7 for 1.

Then an hour after the open Icahn tweeted that he sold the last of his Netflix stake after riding the video streaming king to huge gains.

Read More Carl Icahn sells last of Netflix shares

While stock splits appear like a good thing on the surface because they theoretically should lift demand for the shares from the retail investor, experienced traders will tell you that this is not a reason to buy the stock and often a good time to take some profits like Icahn just did.

Despite the fact that splits do not change a single fundamental factor about the company, data shows the initial gains following announcement of the corporate action are quickly given up.