Korean retail investors, globally renowned for their aggressive stock investment strategies involving high-leverage options or "gambling-style" all-in bets on individual stocks, are making fresh bets on the cryptocurrency sector. Their long-held faith in the "Tesla Motors long-term bull market narrative" is showing major cracks, as their confidence in Tesla Motors' long-term bullish logic appears to be gradually crumbling.

As Korean retail investors' disappointment with the American electric vehicle manufacturer and leader in autonomous driving and humanoid robots intensifies, and their bullish buying interest in cryptocurrencies like Bitcoin and Ethereum surges dramatically, they unusually increased their selling of Tesla Motors stock and related call options last month.

Korean retail investors have gained global fame and can cause dramatic volatility in any international stock within extremely short timeframes, primarily due to their focus on YOLO investment strategies. YOLO - referring to the aggressive investment group with the investment philosophy of "You Only Live Once" - enthusiastically engages in "gambling-style" all-in positions or purchases high-leverage options to bet on individual stocks.

The "YOLOs" have been particularly obsessed this year with heavily betting on the hottest AI computing industry chain companies like NVIDIA, Broadcom, and Taiwan Semiconductor during the AI boom's bullish trends, as well as highly volatile tech stocks with extreme retail participation like Tesla Motors. Their latest bets have shifted toward highly volatile cryptocurrency-related targets.

**Tesla Motors' Popularity Plummets Among Korean Retail Groups**

According to Bloomberg's calculations of custody data, Korean retail investors net sold approximately $657 million worth of Tesla Motors stock in August, marking the largest net capital outflow since at least early 2023.

Conversely, Korean retail investors showed strong preference for more volatile U.S. stock market targets, such as Bitmine Immersion Technologies Inc (BMNR.US), viewed as an Ethereum proxy, with net purchases worth $253 million. ETFs tracking Ethereum and Bitcoin also showed net buying by Korean retail investors.

This latest wave of capital flight by Korean retail investors indicates that one of Tesla Motors' most loyal global retail groups is experiencing a significant decline in their "bull market narrative faith" fervor. Their previous buying-on-dips enthusiasm and massive call option purchasing once created record amplification of the stock's gains.

Korean retail investors' selling of Tesla Motors and shift to Ethereum and other cryptocurrencies, as well as AI computing leaders like NVIDIA, highlights how Korean retail investors previously attracted to high-profile, retail-heavy American tech companies (like Tesla Motors) are now directing funds elsewhere.

"Tesla Motors provided many inspiring long-term bull market narratives in the past, but this year, it hasn't won over more speculative forces and has instead continuously frustrated bulls," said 33-year-old Korean retail investor Han Joong-soo in an interview. He first bought Tesla Motors stock in 2019 but completely liquidated his position earlier this year, turning his attention to stocks he considers to have greater upside potential, such as AI computing industry chain leaders like NVIDIA, Taiwan Semiconductor, and Broadcom.

"It (Tesla Motors) failed to lead market bullish logic with its own AI narrative."

Nevertheless, data shows Tesla Motors remains the core overseas stock held by Korean retail traders, with their overall holdings valued at approximately $21.9 billion. In comparison, AI chip giant NVIDIA and AI application leader Palantir Technologies Inc (PLTR.US) rank second and third respectively among Korean retail investors' preferred stocks, but with significant gaps compared to Tesla Motors' retail stock value.

According to custody data tracking Korean retail capital flows, the exchange-traded fund providing Tesla Motors' double leverage exposure (ETF code: TSLL) was also sold by this group, experiencing the largest single-month capital outflow since at least early 2024 in August, with Korean retail investors' withdrawal valued at $554 million.

**Tesla Motors' Performance and Valuation Continue to Face Setbacks**

This year, Tesla Motors' fundamental performance and valuation have both faced continuous major pressure, particularly affected by multiple headwinds including global investor concerns triggered by Musk's political involvement, the breakdown of Musk's relationship with President Trump, significant sales declines in multiple global locations, and slower-than-expected progress in Full Self-Driving subscription FSD and Robotaxi autonomous taxi rollout.

Tesla Motors' stock price has been highly volatile this year, with cumulative declines exceeding 17%, ranking last among the U.S. "Big Seven Tech Giants." However, during the major rebound period in April-May, gains reached as high as 50%, before entering a downward trajectory with declines of up to 20% in June-July.

Continued decline in automotive sales, particularly Tesla Motors' electric vehicles facing "sales cuts in half" in the European market, has significantly pressured Tesla Motors' overall performance this year. Tesla Motors' market share in Europe has experienced "brutal declines" for seven consecutive months, with July new car sales in Europe dropping by more than 40%. In comparison, overall European new car sales achieved 5.9% year-over-year growth in July. Tesla Motors' European market share was severely compressed from 1.4% a year ago to 0.8%.

Meanwhile, BYD, one of Tesla Motors' biggest competitors also focused on electric vehicles, saw European overall monthly sales surge 225.3%, achieving a 1.2% market share.

Senior analyst Gytis Zizys from SeekingAlpha recently published a research report stating that even though Musk extensively promotes Tesla Motors' Dojo artificial intelligence supercomputing system, Full Self-Driving, Robotaxi, and humanoid robot applications with market scale prospects, current Tesla Motors is essentially still an electric vehicle manufacturer, with automotive sales contributing up to 75% of revenue. The performance contribution from AI supercomputing-driven FSD, Robotaxi, and other "futuristic businesses" remains very minimal with extremely unclear revenue prospects.

The analyst emphasized in the research that Tesla Motors' automotive business-created value will provide massive financial support for future projects driven by Tesla Motors' incredibly powerful AI supercomputing system, including FSD, Tesla Motors Robotaxi, and new ultra-large-scale energy storage projects.

Looking at AI spending by leading U.S. cloud computing companies, powerful AI supercomputing systems require massive capital flows, meaning if the automotive business continues to weaken, Tesla Motors investors primarily consisting of "Tesla Motors believers" will significantly discount their "future faith value discounting" for Tesla Motors' future and Musk himself.

Bloomberg Intelligence-compiled analyst expectations show Wall Street analysts generally expect Google, Microsoft, Facebook parent Meta, and Amazon - these four tech giants - to collectively spend over $350 billion this year on data center expansion or new construction centered on AI computing infrastructure. This represents potential year-over-year growth of nearly 50% based on strong 2024 growth, with expectations to exceed $450 billion by 2026.