Norwegian Cruise Line’s Stock Is Surging. An Activist Investor Is Pushing for Big Changes.

Norwegian Cruise Line’s stock is surging Tuesday, as an activist investor looks to shake up the cruise operator’s business.

Shares of Norwegian (NCLH) were up over 11% in recent trading after Elliott Investment Management revealed a more than 10% stake in the company.

The activist investor said it sent a letter and presentation to Norwegian’s board laying out plans to push for a shakeup of its board, along with changes to improve guest experience and profitability, among other things.

“Over the past decade, the Company has fallen from a best-in-class cruise operator at the time of its initial public offering to a clear industry laggard, suffering from inconsistent strategy, weak execution, inaccurate guidance and poor cost discipline,” Elliott wrote in its letter.

Even with Tuesday’s gains, shares of Norwegian have lost nearly 10% of their value in the last 12 months as the cruise line struggled with growing competition and cost pressures. Its rivals Carnival (CCL) and Royal Caribbean (RCL), meanwhile, have seen their stocks surge roughly 25% over the same period.

A Norwegian Cruise Line spokesperson told Investopedia that the company is committed to delivering value for investors under the leadership of new CEO John Chidsey, and plans to offer more details when the company reports earnings on March 2.

Norwegian announced the appointment of Chidsey last week, replacing Harry Sommer. In its letter, Elliott criticized the choice of Chidsey, the former CEO of Subway and Burger King and a longtime Norwegian board member, as lacking experience in the cruise industry.

Elliott said it is prepared to take its case directly to shareholders at the company’s upcoming annual meeting. It suggested the proposed changes could help Norwegian stock recover to its pre-pandemic level around $56, more than double Friday’s close.

This article has been updated since it was first published to reflect more recent stock prices.