Activist investor Elliott Investment Management is seeking a strategic overhaul at Norwegian Cruise Line Holdings after announcing that it now holds a stake of more than 10% in the cruise company.
Elliott has called for a change to the board of directors and a new business plan. In a letter to the board, it argued that NCLH is undervalued and has "substantial untapped potential" while criticizing it for slipping competitively behind its peers.
"The company has fallen from a best-in-class cruise operator at the time of its initial public offering to a clear industry laggard, suffering from inconsistent strategy, weak execution, inaccurate guidance and poor cost discipline," Elliott partner John Pike and portfolio manager Bobby Xu wrote in the Feb. 17 letter.
In addition to Norwegian Cruise Line, the company includes Oceania Cruises and Regent Seven Seas Cruises.
Last year, Elliott similarly pressured Southwest Airlines to make changes, which led to it reshaping the airline's board, though it did not gain full control of it.
Elliott announced its involvement in NCLH five days after Harry Sommer stepped down as chairman and CEO and board member John Chidsey was appointed to replace him. Chidsey, a former Subway and Burger King CEO, has been an NCLH board member since 2025 after previously serving on the board from 2013 to 2022.
Elliott's involvement was first reported by the Wall Street Journal. In its article, it said that Elliott had been working privately with former Royal Caribbean Group president and COO Adam Goldstein as a possible nominee to NCLH's board.
"Our board of directors and management team regularly engage with our shareholders to hear their views on our strategy and progress, and we appreciate their perspectives," an NCLH spokesperson said in a statement Tuesday. "Of note, this is the first we are hearing from Elliott Investment Management.
"We are committed to delivering durable, long-term value creation, which will be led by our recently appointed CEO, John Chidsey. We look forward to sharing additional information on our earnings call on March 2."
New ships for NCL, Oceania, Regent
Amid its leadership change, NCLH said Feb. 16 it had ordered three new ships with Fincantieri, one for each of its brands. The order grows Norwegian Cruise Line's upcoming ship class and Oceania Cruises' Sonata class to five vessels each. It also expands Regent Seven Seas Cruises' Prestige class to four ships.
The three ships are due for delivery in 2036 and 2037.