Netflix shares skyrocketed — +20% at one point in mid-afternoon trading before closing +13.8% — after the billionaire corporate raider disclosed that he recently bought stock and call options that could give him control of 9.98% of the company. Carl Icahn says in an SEC filing that Netflix is “undervalued” and “may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry.” Icahn also is “considering ways for [Netflix] to maximize shareholder value.” But he has “reached no conclusion” and “may in the future seek to have discussions” with the company. That’s a loud cannon shot across CEO Reed Hastings‘ bow: Icahn made his name as a so-called corporate raider, buying stock in companies that he considered undervalued and then angling either to take control or change the firm’s strategy to boost the share price.

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Netflix could be vulnerable: A lot of investors lost confidence in management last year when it split its streaming video and DVD rental businesses in a way that infuriated many subscribers. The company’s share price has fallen more than 70% since July 2011. Critics also say that Netflix is vulnerable to competition from other streaming services, including Amazon Prime, and is spending too heavily to expand overseas even though it isn’t consistently profitable. The company’s shares rose late last week as a rumor spread that Microsoft might offer to buy it. Netflix management does not own a dominant block of its stock. Hastings owns 4.4%, according to the company proxy filed in April. Investment firm T. Rowe Price controls nearly 9% and The Vanguard Group has 5.1%.

Icahn’s well familiar with the entertainment business. He led a proxy fight to join the board of Blockbuster in 2005, and forced out its CEO. In 2006 he threatened Time Warner, which he wanted broken up, but ended up settling with management. And his struggle to control Lionsgate — which he wanted to merge with MGM — collapsed last year.