Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a sharp 6.92% after-hours plunge on Wednesday, following Tesla's disappointing first-quarter delivery report. The leveraged ETF, which aims to deliver twice the daily performance of Tesla stock, tumbled as investors reacted to the electric vehicle maker's worse-than-expected results.
Tesla reported deliveries of 336,681 vehicles for the first quarter, falling significantly short of analyst expectations of around 378,000. This marked a 13% year-over-year decline, representing Tesla's worst quarterly drop in deliveries in the company's history. The company attributed part of the shortfall to production disruptions related to updates for its popular Model Y vehicle.
Analysts were quick to express their disappointment with Tesla's performance. Wedbush's Dan Ives called the results "a disaster on every metric" and warned that Tesla CEO Elon Musk must "stop this political firestorm" to refocus on the company. The sharp decline in deliveries has raised concerns about potential brand damage stemming from Musk's political activities and their impact on consumer demand.
The weak delivery numbers are likely to prompt analysts to revise their full-year forecasts for Tesla downward, potentially creating additional headwinds for the stock. As TSLL provides leveraged exposure to Tesla's performance, the ETF amplified the negative sentiment surrounding the company's quarterly report.
Investors will now be closely watching for Tesla's full first-quarter financial results, scheduled for release on April 22, to gain further insights into the company's performance and outlook. The market will be particularly interested in any updates regarding Tesla's autonomous driving initiatives and plans to address the challenges highlighted by the disappointing delivery figures.
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