"I think it's very difficult to compete with Netflix, but as once investor said, 'It would be the mother of all auctions if it ever went to auction,'" he said.
On "Fast Money," Icahn commented on his purchase for the first time since his 13-D filing with the Securities and Exchange Commission.
(Read More: Netflix Poison Pill Aims to Thwart Icahn Takeover)
Shares of Netflix closed at $75.97.
Asked about what he believed the company was worth, Icahn demurred.
"I have what I said in my 13-D. I don't have anything definite," he said. "Obviously, I think the company is worth a lot more than what it sells for."
Icahn called Netflix "a great platform" and noted the high barriers to entry for potential competitors, such as Amazon.
"To begin with, I'm not sure you can build the business that easily. It's not like you build a widget factory and you start making widgets," he said, noting that the company enjoyed a strong subscription base. "I just don't think you can buy that. You walk in facing in 27 million subscribers."
Smart TVs would be another area for growth, he said, and that would benefit Netflix.
Icahn said he couldn't understand why Netflix wasn't already an acquisition target, especially with low interest rates.
"The issue is that Netflix has the subscriber base but not the deep pockets," he added.
Icahn declined to detail his plans for Netflix or whether he would make an hostile takeover bid.
"The thought has certainly crossed my mind," he said. "It certainly is one alternative, but I have to say we haven't made that decision at this point."
On the broader market, Icahn said he wasn't as bullish on earnings as some analysts.
"If you're asking me, I'm relatively negative," he said, adding that his positions were "more than completely hedged."
The "fiscal cliff," which would trigger automatic federal spending cuts and see the expiration of the Bush tax cuts weren't "a binary thing," Icahn also said.
"If there's going to be a deal made, it's still going to take a big bite out of spending and the GDP," he said.
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