Elliott Presses for Leadership Changes at Norwegian as Stock Lags Rivals by Double Digits

Elliott Management has built a stake of more than 10% in Norwegian Cruise Line Holdings, setting the stage for a potential battle over the company’s board and long-term strategy.

The activist investor disclosed the position on Tuesday and said it is seeking changes to the cruise operator’s board and management. Shares rose about 6% in morning trading following the announcement. The stock had fallen more than 13% last year.

The Miami-based operator has been dealing with rising costs and plummeting demand for its cruises. Meanwhile, competitors like Royal Caribbean and Carnival have managed to string together solid gains, widening the gap within the tough cruise line industry.

With its new position, Elliott becomes one of Norwegian’s largest shareholders, alongside Capital International Investors and The Vanguard Group.

Elliott criticized the current board, saying directors had failed to fulfill their core responsibilities. It also took aim at management decisions over the past decade, including last week’s appointment of former Subway executive John Chidsey as chief executive officer.

The firm is calling for the addition of new, independent directors with industry and operational experience. According to reports, Elliott has privately approached Adam Goldstein, the former president and chief operating officer of Royal Caribbean, about a potential board seat.

Norwegian said it remains focused on its current strategy. In a statement, a company spokesperson said it is committed to delivering long-term value under the leadership of its recently appointed CEO.

Elliott has also urged the company to adopt a new business plan, outlining its proposals in a presentation and letter sent to the board. The firm said it expects to reach a constructive resolution but is prepared to take its case directly to shareholders if necessary.

According to Elliott, the right changes could push the stock to $56 per share, or nearly 159% higher than it is now.

Analysts cautioned that the turnaround may not be immediate. Patrick Scholes of Truist Securities said many of Norwegian’s challenges stem from years of strategic decisions and cannot be resolved overnight. If Elliott gets its way, Norwegian’s leadership and long-term game plan will change very soon.

At the time of publishing this article, Stocks.News holds positions in Vanguard as mentioned in the article.