Musk Loses $36 Billion in a Week—Yet Retail Investors Pour $650 Million to Bet on Tesla’s Comeback?

TradingKey - Tesla’s stock fell around 15% last week, wiping more than $36 billion off Elon Musk’s personal fortune—the largest single-week decline in recent years.

Despite the sharp drop, retail investors have not backed down. Instead, they’ve rushed to buy the dip, pouring over $650 million into Tesla’s 2x leveraged ETF (TSLL) in a single week—the highest weekly inflow since the fund’s launch in 2022.

Data from Goldman Sachs showed that May 30 saw the largest net buying volume in two months, signaling that many investors still believe in the so-called “buy-low-Musk” strategy.

Behind this aggressive positioning is the market turbulence caused by the public rift between Musk and former U.S. President Donald Trump. The dispute originated from their disagreement over the Grand Beauty Act, with Musk calling the bill “disgusting” and accusing it of prioritizing short-term election gains over long-term fiscal health.

Trump responded by expressing disappointment with Musk and even threatened to cancel federal contracts with his companies—a move that further rattled investor sentiment over Tesla’s policy outlook.

At the same time, Tesla itself continues to face mounting challenges. Intensifying competition in China and slowing demand in Europe and the U.S. are putting increasing pressure on its fundamentals. Questions over the company’s valuation model are also growing louder.

Nonetheless, some investors continue to treat Tesla as a flagship growth stock, leveraging instruments like TSLL to double down on their bets. According to UBS data, after Tesla’s sharp Friday selloff, TSLL saw significant inflows the following day, suggesting that certain investors remain willing to take positions during the pullback.

However, Miller Tabak strategists warned that such bets may be premature. Tesla is now facing fiercer competition and stronger earnings pressures than ever before. If a rebound fails to materialize, excessive reliance on leverage could lead to even greater losses.