We Be Huntin' Series - What is the Catalyst for the Catalent Inc (NYSE: CTLT) Trade

 

Hunting in Packs - Paul Singer -- Catalent (CTLT)

Investing is a lot like fishing or poker -- it takes patience and discipline. I've found that some of my best trades have come about because I did my research early, had conviction, and then entered the terms of my trade in hopes it would be filled when the market met my expectations -- NOT the other way.

My Mansa Musa network often helps to shape my thinking and when we execute trades together or hunt -- we often make money together in business, real estate, investing, etc. When I combine all these concepts or mentalities into one you get the Mansa Musa Mentality. Arguably the richest person in history, Mansa Musa, ruled over a large empire and put cities like Timbuktu on the map as they were known for their cities and libraries.

This posts is an example of how the #MansaMusaMentality work and how I use my extended network to invest. Almost like a case study, I'll highlight how these contacts guide me on investments such as buying real estate, stocks, precious metals, cryptocurrencies, etc. And I want to foster a community culture, so I'll show you how I learn from them and maybe in the future we can crowdsource or here we call it #tribesource investment ideas for the future.

"Detail" - A Breakdown of my Catalent (CTLT) Investment

Year: 2023

Throwback Link:  n/a

Research Timetable: July 2023

Research Details:

I read a really good article about Paul Singer, an investor, who is in my Mansa Musa network. Don't believe me just look him up in this 2021 article: URBANOMICS: Mansa Musa Mentality - Building Your Investment Empire

Paul Singer is a hunter, or should I say investor that comes across as shrewd and non-compromising. I started reading articles last year about how he was setting his sights on Catalent. They've had of issues going on:

• Declining business after the COVID-19 pandemic
• Senior Management leaving the company
• FDA notice about cleanliness issues at a facility (a notice or citation is when the regulators find a problem and in healthcare this is bad)
• Left at the Alter - Snubbed by the company Danaher, there was hook up here
• Delayed earnings reports (think about getting your annual checkup, but not wanting to tell anyone)
• Down 50% of their value in since 2022; down 65+% since 2021

I don't rock with Paul on a number of social issues but when he invests in companies to agitate and change things -- good things usually happen.

• Catalent caved and gave Paul's investment firm four board positions,
• Created a strategic review committee, which usually means they wanna hook up with someone (swipe right)
• They are the primary manufacturer of Novo Nordisk's weight loss drug, Wegovy, and could be a takeover target as companies want to consistent pipeline to deliver these blockbuster drugs

Huntin' In Packs Alert: In August 2023, I decided it was worth riding shotgun with Paul on this one.

The Setup:

Aug 2023: $40 

Feb 2024: 2 Trades at the following prices:

• $60
• $56.2691

How is it Performing: Well in February 2024, Novo Nordisk's holding company made an announcement they want to hook up with Catalent at a range of $16 Billion dollar value. So, I went shopping again and you can see the prices above.

All was well until April 2024 when the Federal Trade Commission and Novo Nordisk discussed initial hook up plans with Catalent. Novo pulled their filing to the FTC and subsequently refiled. Then in May 2024, the Federal Trade Commission requested more information on Novo Nordisk hook up plans, shortly after an application was filed.

I'm exhausted watching this soap opera but the stock has been steadily climbing from the low $50s and is now approaching $60. They buyout price would be around $65 if all goes well. I wish I would have done more research and identified how entangled Catalent was with other providers like Eli Lilly but at the end of the day, Lilly could have swiped right and tried to hook up with this company too. We'll see if CTLT is too important to be bought out when the FTC decides, so stay tuned. Right now, I'm up only slightly but it will be a nice win, in a short period of time if this hook up makes it to the alter.