As Elon Musk’s fortune plunged by $36 billion last week and Tesla Inc.’s stock suffered a brutal drubbing, his most ardent backers rushed in to buy the dip — with leverage.
Investors poured $651 million into the Direxion Daily TSLA Bull 2X Shares (ticker TSLL), marking the largest weekly inflow since the fund’s 2022 debut, according to data compiled by Bloomberg. The biggest chunks came in on Thursday and Friday.
The buying spree into TSLL—which is designed to deliver twice Tesla’s daily return—reflects a now-familiar reflex: doubling down on Musk during selloffs, a strategy that’s worked spectacularly in the past. What’s different now is that the trade faces an unprecedented risk after last week’s clash between the tech executive and President Donald Trump over a signature tax bill, with the fallout exposing big cracks in Musk’s political capital.
Beyond the personal drama, Tesla faces intensifying business pressures from competition in China and cooling demand in developed markets. Broader questions also linger around the electric-vehicle maker’s valuation after years of trading at rich multiples relative to traditional automakers.
All that wasn’t enough to stop the unwavering faith — or speculative fervor — still driving retail traders who have repeatedly profited betting on Musk’s comebacks.
“The retail investor has done very well buying Elon Musk on weakness in the past, so they see the recent drop as a buying opportunity once again,” said Matt Maley, chief market strategist at Miller Tabak + Co. “They seem to be a little early this time given the uphill climb Tesla is facing.”
The president and Musk last week exchanged public barbs following a break in their notorious friendship that developed as the Tesla CEO campaigned for Trump and put money toward his 2024 re-election campaign. But their views appeared to diverge in recent days — and boiled over on Thursday — over Trump’s “Big, Beautiful” tax bill, which Musk criticized, prompting the president to say that he was “disappointed with Elon.”
The fallout continued throughout the day, with Trump calling the billionaire CEO “crazy” and threatening to end his government contracts. Musk, in turn, said the president wouldn’t have won the election without him.
Tesla shares declined, leading to one of the biggest-ever wipeouts in Musk’s net worth, with $34 billion erased on Thursday alone. Tesla shares dropped 15% for the week to around $295 by end-of-day Friday.
Yet, buying when Tesla shares are in free-fall has tended to work out in the past for investors. The company’s stock declined to $60 apiece during the pandemic, before recovering. In 2022, the year TSLL started trading, it notched a $300 million inflow even as the company’s shares plunged 65%. The following year, Tesla’s stock surged 102%.
Judging by flows into TSLL, it looks like Tesla bulls are undaunted by the Musk-Trump fallout. Investors have added more than $3.5 billion into the ETF so far this year, even as Tesla’s stock has tanked more than 26% year to date. The amount the fund garnered is also more than triple what it saw during all of 2024, a span during which Tesla’s shares surged more than 60%.