Elon Musk's U-turn on joining Twitter's board means he's left the door open to buying the company

• Twitter announced last week that Elon Musk would join its board of directors.
• But Twitter's CEO said Sunday night that Musk had ultimately decided against taking his board seat.

In an extraordinary U-turn late on Sunday it emerged that Elon Musk, Tesla CEO and the world's richest person, would not be joining Twitter's board.

Twitter CEO Parag Agrawal made the announcement on Twitter just five days after excitedly announcing that Musk would become a director. Agrawal said Twitter offered the board seat to Musk on Saturday, but the billionaire turned it down that same morning.

Musk's decision seems to have blindsided Twitter: at the time of writing, Musk remained listed on the company's website as a member of its board of directors.

Wedbush analyst Dan Ives said the unexpected move could signal a more aggressive approach from Musk towards buying Twitter stock.

"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," Ives told Insider.

He added there was a "high likelihood that Elon takes a more hostile stance towards Twitter and further builds his active stake in the company."

Musk revealed in early April that he'd amassed a 9.2% stake in Twitter, making him the company's largest shareholder.

Joining Twitter's board would have limited him to buying 14.9% of the company, as outlined in a Securities and Exchange Commission filing signed by Musk.

As he is no longer joining the board, Musk can buy as much Twitter stock as he pleases – meaning he could attempt to acquire the company if he so wishes.

It's also possible a board seat would have constrained Musk's capacity for tweeting.

Musk is a prolific user of Twitter, with over 81 million followers. Twitter's founder and former CEO Jack Dorsey said in 2016 that Musk was one of his favorite Twitter users.

But Musk's tweets carry some risk. In 2018 he agreed to a $20 million settlement with the SEC over an infamous tweet in which he said he was considering taking Tesla private. Part of the settlement involved Tesla introducing "additional controls and procedures" to oversee Musk's tweets.

Agrawal said Sunday that the board was "clear about the risks" of appointing Musk. He added: "Having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward."

As Twitter's largest shareholder sitting outside the company, Musk will likely have more freedom to publicly pressure it for changes.

"Elon is our biggest shareholder and we will remain open to his input," Agrawal said Sunday.

In the weeks leading up to the board seat announcement, Musk polled his followers on various proposed features, such as the ability to edit tweets.

Musk himself has remained relatively quiet as to why he decided not to join the board. Following Agrawal's announcement Sunday, Musk tweeted an emoji of a face covering its mouth – but it was deleted hours later, according to the Financial Times.

Musk did not immediately respond when contacted by Insider for comment outside normal working hours.