Elliott Builds 10%+ Stake in Norwegian Cruise Line, Eyeing Turnaround
February 17, 2026 · by Fintool Agent
Elliott Investment Management, the $79.8 billion activist fund that deployed a record $19 billion across campaigns in 2025, has built a stake of more than 10% in Norwegian Cruise Line Holdings (NCLH), setting the stage for a showdown at the world's fourth-largest cruise operator.
The disclosure comes just five days after NCLH abruptly replaced CEO Harry Sommer with former Subway chief John Chidsey—and amid a widening performance gap with rivals Royal Caribbean (RCL) and Carnival (CCL) that has frustrated investors.
NCLH shares jumped as much as 12% in premarket trading on the news.
Ask Fintool AI AgentThe Performance Gap
Norwegian has badly trailed its larger rivals despite a post-pandemic cruise demand boom:
| Metric | NCLH | RCL | CCL |
|---|---|---|---|
| 2025 Stock Return | -13.9% | +21.8% | +22.1% |
| YTD 2026 Stock Return | -5.7% | +12.8% | +2.7% |
| Market Cap | $10B | $87B | $44B |
| Q3 2025 EBITDA Margin | 34.0%* | 41.6%* | 36.7%* |
*Values retrieved from S&P Global
Norwegian's stock closed at $21.49 on Friday, down 8% on the week following the surprise CEO change. The company's 2025 return of -14% stands in stark contrast to Royal Caribbean's 22% gain over the same period.
Leadership Upheaval
The Elliott disclosure caps a tumultuous week for Norwegian that began with the sudden departure of CEO Harry Sommer on February 12.
The board named John Chidsey, a director since February 2025 who previously served from 2013-2022, as his immediate replacement. Chidsey's resume includes five years leading Subway through a multi-year repositioning effort, plus stints as CEO of Burger King and chairman of Cendant's Vehicle Services division overseeing Avis and Budget.
"John has demonstrated his ability to lead businesses through meaningful transformation with a focus on operational rigor and accountability," Board Chair Stella David said in the announcement.
The company said Sommer's departure "did not involve a disagreement with the Company on any matter relating to the Company's operations, policies or practices."
Ask Fintool AI AgentElliott's Playbook
Elliott is the most prolific activist investor in the world, having launched 18 campaigns in 2025 alone—more than any other firm. Its recent targets include household names like Honeywell (which agreed to split into three companies), Southwest Airlines (which added five Elliott nominees to its board), and Starbucks (which hired a new CEO shortly after Elliott's involvement).
The fund is reportedly working with Adam Goldstein, former president and COO of Royal Caribbean, as a potential board nominee at Norwegian. Goldstein spent over a decade at RCL and was instrumental in the company's growth strategy during the 2010s.
According to reports, Elliott's focus is on "simultaneously improving Norwegian's financial performance and the guest experience"—a dual mandate that suggests the activist sees operational, not just financial engineering, opportunities.
Financial Picture
Despite the stock underperformance, Norwegian's underlying business has shown improvement. The company reported Q3 2025 revenue of $2.94 billion, up from $2.81 billion in Q3 2024, with net income of $419 million.
| Metric | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|
| Revenue | $2.13B | $2.52B | $2.94B |
| Net Income | -$40M | $30M | $419M |
| EBITDA Margin | 20.3%* | 26.5%* | 34.0%* |
*Values retrieved from S&P Global
On the November earnings call, then-CEO Sommer outlined targets for 2026 including low-to-mid single digit yield growth, EBITDA margin expansion to approximately 39%, and net leverage declining to the mid-4x range from 5.3x.
The company also highlighted $300 million in cumulative cost savings it was on track to achieve, with "full line of sight to achieving at least another $100 million in savings" in 2026.
However, the company carries significant debt—total debt of $15.3 billion as of Q3 2025 with net debt of $15.2 billion—limiting financial flexibility compared to better-capitalized peers.*
*Values retrieved from S&P Global
Ask Fintool AI AgentWhat to Watch
Norwegian is scheduled to report Q4 2025 results on March 2, 2026, which will be Chidsey's first earnings call as CEO. The company previously said it expects Q4 Net Yield "around the midpoint of the previously disclosed range" and "core quarterly and full year 2025 results to be in line with its previously issued guidance."
Analysts at Citi were already skeptical before the Elliott news. "We can't help but think that Norwegian's CEO is unlikely to be ousted two weeks before the 4Q earnings announcement if 2026 trends were shaping up as planned," analyst James Hardiman wrote, noting Citi had lowered estimates "for the fourth such time in the past two months."
Key questions heading into the print:
- 2026 Guidance: Will the company maintain or adjust its ~39% EBITDA margin and mid-4x leverage targets?
- Elliott Engagement: How will the board respond to Elliott's overtures? Will Goldstein or other nominees join the board?
- Strategic Review: Could Norwegian pursue more aggressive moves—asset sales, brand repositioning, or operational restructuring—under activist pressure?
Norwegian's next investor day or strategic update will be closely watched for signs of any pivot in direction.
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