Catalent stock jumps on report of activist investor Elliott taking stake

Catalent sees its shares boosted on the news of activist investor Elliott Management taking a stake into the drugmaker, as reported by the Wall Street Journal. Yahoo Finance Live's Diane King Hall and Julie Hyman examine the stock action.

Video Transcript

DIANE KING HALL: Shares in drug maker Catalent jumping this morning. This is on a report from the Wall Street Journal that activist investor Elliott has built a significant stake in the business. Now, Catalent manufactures drugs, vaccines, and gene therapies. It has a market cap of $8.3 billion, a little over that. Now, the report says the exact size of the stake is still unclear but is certainly helping the share price right now.

JULIE HYMAN: Yeah, it is.

DIANE KING HALL: [? Hopping ?] 5%.

JULIE HYMAN: You know, while we're talking about companies that make stuff for other companies, that's what Catalent does, right? They make drugs for other companies. They've made COVID-19 drugs, for example. But they have had some issues here. There have been some questions about quality control at the company.

There's been chatter about whether it would be a takeover candidate. The company's CFO, I believe, left the company. They did find a replacement for that person. The CEO has only been there a little over a year. So there's a lot of like sort of moving parts amidst Elliott swooping in here to try to push for some change.

DIANE KING HALL: Yeah, and apparently they, you know, delayed earnings a few times. So they're dealing with a lot of issues behind the scenes. But Elliott getting into this is certainly helping give Catalent just some support.

JULIE HYMAN: Yeah. And we should mention-- oh, that's right. We said the Wall Street Journal is reporting this, so they're giving a lot of the background on what's going on here. When they did finally come out with revenue, by the way, or for their numbers in June, they said revenue fell by 19% for the prior quarter. So they delayed it, and then it wasn't great.

DIANE KING HALL: Yeah. And we'll see what happens with Elliott getting in there.

JULIE HYMAN: We will.

DIANE KING HALL: If there'll be any sales from there.

JULIE HYMAN: We'll look for more details on that. Right.