When Paul Singer’s Elliott Investment Management quietly builds a 10% stake in a company, the rest of Wall Street pays attention. On Tuesday, the Wall Street Journal broke the news: Elliott has amassed more than a 10% position in Norwegian Cruise Line Holdings, making the activist hedge fund one of NCLH’s largest shareholders. Shares surged 12% in premarket trading.
The timing is fascinating. Norwegian’s stock has cratered more than 20% over the past year while rival Royal Caribbean has been printing money. RCL is projecting strong full-year demand, riding a wave of affluent consumer spending, and its stock reflects it. Norwegian, meanwhile, has been the industry laggard — operationally sluggish, strategically unfocused, and losing ground quarter after quarter. That’s exactly the kind of gap Elliott lives to exploit.
Elliott’s playbook here is aggressive and specific. According to the Journal, the fund has already privately approached Adam Goldstein — the former president and COO of Royal Caribbean — as a potential board nominee. The message is clear: Elliott wants Norwegian to run more like the competitor that’s eating its lunch. They’re not just buying shares and writing letters. They’re recruiting the people who built the playbook Norwegian needs to copy.
Norwegian just appointed former Subway CEO John Chidsey as its new chief executive last Thursday, a move that sent shares sliding 7% on Friday. Whether Chidsey and Elliott can coexist or will clash remains an open question. But for traders, the setup is textbook: an underperforming stock with a massive activist catalyst, new management, and a sector where consumer demand remains robust. Carnival and Royal Caribbean both caught a bid on the news — the rising tide effect is real.
History says activist campaigns in the cruise sector tend to work. These are capital-intensive businesses with high fixed costs, which means small operational improvements flow straight to the bottom line. If Elliott can push Norwegian to close even half the efficiency gap with Royal Caribbean, the upside from here could be substantial. The smart money is literally betting on it — to the tune of over a billion dollars.