Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a significant pre-market plunge of 14.74% on Monday, following Tesla CEO Elon Musk's announcement of forming a new political party called the "America Party". This move has reignited his feud with President Trump and raised serious concerns among Tesla investors about Musk's focus on the company.
The sharp decline in TSLL, which aims to deliver twice the daily performance of Tesla's stock, reflects the heightened uncertainty surrounding Tesla's future. Musk's decision to create the "America Party" comes in response to his opposition to President Trump's recent "One Big Beautiful Bill," which includes tax cuts but is projected to increase the national debt by nearly $4 trillion over 10 years.
Investors and analysts are expressing deep concern about the potential impact on Tesla's operations and stock performance. Dan Ives, an analyst at Wedbush Securities, stated, "Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story." The timing is particularly sensitive as Tesla is in the process of launching self-driving taxis and planning to sell humanoid robots in 2026, both of which are seen as potentially trillion-dollar opportunities for the company.
The political turmoil comes at a time when Tesla's electric vehicle business is already facing challenges, with sales down 13% in the first half of 2025 compared to the previous year. The company's brand has also been affected by Musk's political activities, potentially alienating some core EV buyers. As a result, the leveraged nature of TSLL has amplified the negative sentiment, leading to this dramatic pre-market plunge.
