Fidelity is marking the mail-order DVD rental company

Netflix

(NFLX) - Get Report

with a Return to Sender stamp.

The Boston-based mutual fund giant, previously one of Netflix's largest shareholders, has sold off more than three-quarters of its holdings in the company's stock, according to a Wednesday

Securities and Exchange Commission

filing.

The disclosure follows a deep slide in Netflix's stock over the past year, as investors have paid increasing attention to the growing competition facing the pioneering DVD rental house. Netflix stock traded at $10.43 Wednesday, down 23 cents for the day and well off the stock's 52-week high of $39.77.

Shares in Netflix fell 41% in a single day last month, following the company's announcement

that it was cutting its monthly rental fee and guiding for lower profitability in 2005.

Fidelity's Wednesday filing indicated the company owns 1.5 million shares of Netflix stock, or 2.9% of shares outstanding. Back in January, Fidelity indicated that it owned 6.4 million Netflix shares, or 12.5% of the company's stock.

It appears from the date of Fidelity's filing that it cut its stake below the 5% ownership level sometime since the beginning of October.

Michael R. Littenberg, a partner practicing securities law at Schulte Roth & Zabel (and not involved with the companies at issue), says a mutual fund making such a reduction in its stake would, at the latest, have to disclose it 10 days after the month in which it sold its shares.