Status: 11/10/2021 2:25 p.m.
Kimbal Musk sold a large block of Tesla shares just before his brother Elon’s Twitter poll. It’s not the first time that the family member has caused irritation.
Is it all just a happy coincidence? One day before his big brother Elon’s Twitter poll caused Tesla shares to collapse, Kimbal Musk sold Tesla shares on a massive scale, making a profit of $ 108.8 million in a very short space of time. What many do not know: Kimbal Musk is the fifth largest shareholder in his brother’s company and Tesla board member.
In the poll in question, Tesla boss Elon Musk had Twitter users vote on whether he should sell ten percent of his Tesla shares. 58 percent were for it. It is unclear whether Kimbal Musk knew something about his brother’s plans in advance and was thus guilty of insider trading. The fact is: He could hardly have chosen a more favorable time to sell.
The prospect of a larger supply of Tesla shares on the market caused the hyped paper to abruptly break off its record hunt. On Monday and Tuesday, Tesla shares fell a total of 16 percent – and accordingly reduced Elon Musk’s assets. In this week alone, the Tesla boss has lost a total of 50 billion dollars and is currently “only” 323 billion dollars according to the Bloomberg Billionaires Index.
A fortune that, not least, his younger brother can ultimately only dream of. With an estimated net worth of $ 950 million, Kimbal Musk is just a tiny fraction of what his brother brings on the scales.
“Excessive Compensation” for Musk and Murdoch?
Meanwhile, it is not the first time that Kimbal’s involvement in his brother’s business has attracted criticism. At the Tesla general meeting in October, the previous directors of the board of directors, James Murdoch and Kimbal Musk, received significantly less approval than in the previous year. They were re-elected with only 70 and 80 percent respectively. For comparison: in the previous year, Kimbal Musk had received 98.8 percent of the vote.
This was preceded by a heated debate about the – compared to companies from the same industry – “excessive remuneration” of the board members, for example in the form of “large share gifts”, which the influential advisors of Institutional Shareholder Service (ISS) had initiated.
This is how the brothers earned their first money
Even if there is a big gap in wealth between Kimbal and Elon Musk today: The two brothers earned their first big money together. With a starting capital of $ 38,000 provided by their father, they built ZIP2, an online city guide. Back in the 1990s, it was a revolutionary idea.
In 1999, the Musk brothers sold their company to Compaq for the proud price of more than $ 300 million – never before has that much been paid for an Internet company. The brothers invested the money in new projects: Elon in the PayPal predecessor X.com and Tesla, and Kimbal in his training as a chef.
Even today, Kimbal is closely involved in his brother’s business: not only has he been on the Tesla Board of Directors since 2004, but he also holds a leading position in Elon’s space company SpaceX.
Off to the stove!
But even independent of his brother, Kimbal Musk has been extremely active as an entrepreneur in the past decades, setting up companies such as The Kitchen, OneRiot and Square Roots. With The Kitchen, Kimbal has created a restaurant chain that is characterized above all by its close cooperation with local producers and a seasonal selection of dishes.
According to Kimbal, the next generation’s greatest chance is not in digitization, but in healthy, conscious nutrition and good food; an assessment that his brother and technology freak Elon Musk is unlikely to share.
Kimbal Musk’s kitchen area is not so much the metropolises on the coast as the so-called “Middle America” - a region that, in his opinion, still has some catching up to do in terms of quality food.
Healthy nutrition – with containers and “learning gardens”
The topic of healthy eating is also in the foreground at Square Roots. Kimbal Musk is the co-founder and chairman of the agricultural company that grows food in covered, air-conditioned containers. The aim is to bring fresh and regional food into the cities and encourage younger generations to take up agriculture.
Square Roots aims to bring fresh food to cities using the indoor vertical farming method.
Image: Square Roots Urban Growers
A goal that the son of a nutritionist also pursues with his non-profit organization Big Green. The project, which started in 2011, has already designed over 200 “learning gardens” on school playgrounds to show students how they can grow food and eat healthily.
Musk has already received several awards for his philanthropic commitment; In 2017 he received the Charles Schwab Foundation’s “Social Entrepreneur of the Year” award, and the World Economic Forum named him “Global Social Entrepreneur”.
What’s behind the Musk stock sale?
Speaking of philanthropists: It is questionable whether Kimbal’s brother Elon Musk will sell ten percent of his Tesla shares just so that the richest person in the world can finally pay tax on a few percent of his wealth.
In any case, investor Michael Burry, who became legend by predicting the real estate crash in the United States, claims that Musk wanted to sell the shares anyway – to pay off personal debts. However, financial self-interests could also play a certain role in this tweet: Burry is betting heavily on falling Tesla prices.