Shares Norwegian Cruise Lines (NYSE: NCLH ) It rose 12.9% in February, according to data from S&P Global Market Intelligence.
Norwegian rose last month after activist hedge fund Elite Management disclosed a nearly 10% stake in the company and issued a presentation outlining how it could improve its results.
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Investors initially responded positively to the prospect of the necessary changes; However, after last week’s fourth-quarter earnings release and the outbreak of war in Iran, the stock fell to even lower levels since it began in February.
On the plus side, this pullback may give investors another chance to sell this value stock at a lower level, while also giving Elliott more leverage to advocate for changes.
Norwegian has badly underperformed other major cruise company stocks for years, but Elliott’s presentation claimed those were fixable problems, not structural problems. Specifically, Elliott cited years of executive mismanagement, excessive pay, related-party deals, and an unprecedented board of directors as culprits.
Perhaps anticipating an active campaign, Norway had already replaced its CEO a few days before the Elite presentation. The company named board member John Chidsey as CEO, replacing outgoing CEO Harry Sommer, who had served since 2023.
However, Chidsey may also receive pressure from Elite. However, Chedsey served on Norway’s board of directors from 2013 to 2022, and again from 2025 onwards. So, it is likely that Elliott is not keen on appointing Chidsey, given that he was on the board at the time of Norway’s alleged mismanagement.
Still, investors initially cheered Elliott’s engagement in February. But when the company reported earnings on Monday of last week, the results and guidance shocked the market, sending the shares back on track. Combined with the fallout from the war in Iran, shares ended this week even lower than when they started in February.
To no one’s surprise, Elliott jumped on the Q4 results to push its way into naming new board members, releasing a statement shortly after, stating:
Norway’s pessimistic outlook for 2026 significantly falls short of the company’s potential. Commentary on today’s earnings call reinforced a troubling pattern of executive blunders and strategic mistakes across the business that have been years in the making. These persistent shortcomings underscore the urgent need for comprehensive board renewal to strengthen accountability, oversight, and restore investor confidence. Elliott is committed to ensuring that Norwegian has an independent, experienced, and fully engaged board to return the company to industry-leading performance.
