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Elon Musk’s decision to reject a seat on Twitter’s board of directors could set up a “Game of Thrones”-style battle over the social media platform’s future in the coming days, according to a prominent analyst.
Twitter CEO Parag Agrawal said Musk backed out of an agreement to take a board seat on Saturday, the same day his appointment was set to become official.
The reversal likely stemmed from a dispute between Musk and Twitter over how the billionaire could discuss the company’s activities in public — and more trouble lies ahead, according to Wedbush analyst Daniel Ives.
“This now goes from a Cinderella story with Musk joining the Twitter board and keeping his stake under 14.9% helping move Twitter strategically forward to likely a ‘Game of Thrones’ battle between Musk and Twitter with the high likelihood that Elon takes a more hostile stance towards Twitter and further builds his active stake in the company,” Ives said in a note to investors.
Musk, who is Twitter’s largest individual shareholder following his acquisition of a roughly 9% stake in the company, would have been prevented from acquiring more than 14.9% of the company had he joined the board, Ives noted.
By reneging on the agreement, Musk is no longer subject to that limit – meaning he can acquire even more influence by snapping up more shares.
The announcement came after Musk spent the weekend critiquing Twitter on his account, suggesting the platform might be “dying” and posting a now-deleted poll asking if the company should change its name.
Twitter did not reveal what caused the board agreement to fall apart. However, Musk “liked” a tweet
in which a user suggested he backed out of the deal because Twitter executives told him to “play nice and not speak freely” on the platform.
Musk also amended an SEC filing on his Twitter holdings to suggest he will be outspoken about the company in the days ahead.
The amended filing said Musk “may express his views to the Board and/or members of the Issuer’s management team and/or the public through social media or other channels with respect to the Issuer’s business, products and service offerings.”
Ives outlined three potential scenarios for Musk’s involvement with Twitter in the near future – suggesting he could partner with an activist investment firm to pressure the company; agitate for an overhaul himself through public calls for changes to the platform; or simply decide the investment is not worth the trouble and sell off his shares.
“In our opinion its likely paths 1 or 2 with the Street now focused on Musk’s next poker (next filing/stake in Twitter) move in this ongoing soap opera between Elon and Twitter,” Ives added.
Musk’s change of heart suggests more discord is ahead for Twitter – which was already facing criticism from its own employees over the initial decision to offer the Tesla CEO a seat on its board.
Twitter sought to ease the employees’ concerns by hosting Musk for an “ask me anything” town hall – an event that is more than likely “not happening anymore,” a company spokesperson told The Post.
Twitter also referred to the lengthy statement posted to Agrawal’s account revealing Musk had decided not to join the board. In the statement, Agrawal said he felt the surprise development was “for the best.”
“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal wrote. “The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”
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