Activist hedge fund Elliott Investment Management has disclosed a stake exceeding 10% in Norwegian Cruise Line Holdings, citing concerns over corporate governance and management spending, including on a Katy Perry concert, according to a report by Bloomberg.
Elliott argued that such outlays have not generated shareholder value and outlined a strategy for Norwegian shares to reach $56. Following the disclosure, Norwegian shares surged 12% to $24.10 in New York, marking the company’s largest one-day gain since April and giving it a market value of nearly $11bn.
The activist fund also criticised board succession decisions, questioning the appointment of a long-tenured director lacking cruise-industry experience, and called for a more rigorous selection process. Elliott said it has identified qualified candidates for the board, with some positions up for reelection in March.
Norwegian, which recently announced CEO Harry Sommer’s immediate departure and the appointment of John Chidsey, former CEO of Subway Restaurants Inc, described Elliott’s comments as its first public statement from the investor. A company spokesperson said, “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.”
Elliott highlighted what it deemed questionable discretionary spending, including flying guests to Reykjavik, hosting a pop concert, and curating at-sea art experiences, while Norwegian’s stock performance lagged peers.
Despite strong demand in the cruise sector, Norwegian’s share gains of 97% since the start of 2023 trail competitors Carnival Corp (+305%) and Royal Caribbean Cruises Ltd. (+555%) over the same period.
