Elliott Versus Norwegian Cruise Is About More Than Katy Perry

Norwegian Cruise Lines Holdings Ltd. was always tempting fate. The US cruise operator flew 2,600 guests to Iceland in 2022 for a post-pandemic ship launch party featuring singer Katy Perry, and later boasted of spending millions of dollars on abstract art, including multiple Picassos and a cubist puppy sculpture. In nautical terms, this is a little like a boat that’s holed below the waterline dropping hunks of fresh meat into the ocean. Sooner or later, the sharks are going to circle.

Elliott Investment Management said last week that it has amassed a position of more than 10% in the Miami-based company and is seeking “comprehensive” board and management changes. The activist investor accused Norwegian’s leadership of wasteful spending and a catalog of governance failures and strategic missteps. Elliott contends the overhaul it’s pushing could cause the stock price to more than double to $56 and says it's prepared to take its case directly to shareholders.