Does Elon Musk's About-Face On Twitter Portend 'Game Of Thrones' Battle Ahead?

Tesla, Inc. TSLA CEO Elon Musk disclosure of a passive stake in Twitter, Inc. TWTR last week and subsequent announcement concerning joining the board of the social media platform propelled Twitter stock higher. 

In a U-turn,Twitter CEO Parag Agrawal announced late Sunday that Musk has decided not to join the board.

The Tesla Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $1,400 price target for Tesla shares.

The Tesla Takeaways: Twitter's board and Musk may have been in disagreement over the latter's communications with the public over the social media platform, Ives said in a note.

The short messaging app may have required Musk to take a back seat or quiet stance as a precondition for joining the board, the analyst said. 

"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," he said.

The odds of Musk taking a more hostile stance toward Twitter and further building his active stake in the company are now higher, Ives said.
Related Link: Why Elon Musk Building His Twitter Stake Signals 'More Aggressive' Involvement Is Likely

The decision by the world's biggest billionaire not to join Twitter's board could lead to three scenarios, Ives said.

Musk could team up with a private equity partner and force major strategic changes at Twitter and/or a sale, the analyst said.

The analyst also sees the possibility of Musk creating more "noise and angst" for the Twitter board with various proposed platform changes. Alternatively, Musk might say it's "game over" and reduce his stake, severing ties with Twitter, he said, 

"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 reiterated his view that Musk's focus on Tesla is unlikely to see any risk from this Twitter situation.

TWTR Price Action: Twitter shares were up 0.37% at $46.36 late Monday morning, while Tesla shares were down 3.39% at $990.73, according to Benzinga Pro. 

Photo courtesy of Tesla.