Direxion Daily TSLA Bull 2X Shares (TSLL), a leveraged ETF designed to deliver twice the daily performance of Tesla stock, plummeted 13.03% in pre-market trading on Thursday. The sharp decline comes in response to Tesla's disappointing second-quarter earnings report and cautious forward guidance released after the market close on Wednesday.
Tesla reported second-quarter revenue of $22.5 billion, down 12% year-over-year and slightly below analyst expectations of $22.79 billion. Earnings per share came in at $0.40, missing forecasts of $0.43 and representing a 23% decline from the same period last year. The company's automotive revenue, which accounts for the majority of its business, fell 16% to $16.66 billion.
Adding to investor concerns, Tesla CEO Elon Musk warned of potential headwinds ahead. "We probably could have a few rough quarters. I'm not saying we will, but we could," Musk stated during the earnings call. He cited challenges such as the expiration of EV tax credits and potential impacts from changes in EV incentives as factors that could affect Tesla's performance in the near term. The company also noted that orders placed in late August may not qualify for EV tax credits, potentially impacting demand.
Despite the negative short-term outlook, Tesla remained optimistic about its long-term prospects. The company reiterated its plans for production of a more affordable vehicle model in the second half of 2025 and expects to start volume production of its Semi model and autonomous Cybercab in 2026. Tesla also highlighted its ongoing investments in AI and robotics, positioning itself as a leader in these emerging technologies. However, investors seemed to focus on the near-term challenges, leading to the significant decline in both Tesla stock and the leveraged TSLL ETF.
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