Yesterday, I purchased shares of TSLQ at $16.61. Shortly after, the price dropped further, hitting a new 52-week low. Surprisingly, I don’t regret the decision. For context, TSLQ is a 2x inverse ETF that aims to deliver twice the opposite daily performance of Tesla’s stock (TSLA). So when TSLA goes up, TSLQ tends to fall—and vice versa.
Tradr 2X Short TSLA Daily ETF (TSLQ)
Yesterday, Tesla’s stock rallied significantly, but I remain bearish on the company’s outlook, and I see the recent rally as a short-term reaction, not a sustainable trend.
Tesla Motors (TSLA)
Why I’m Still Bearish on Tesla?
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Falling European Sales: The EV maker's sales in Europe have now declined for four consecutive months, a trend that shouldn't be ignored. Europe is a crucial market for EV adoption, and continued weakness there signals demand challenges. This isn’t just a blip—it could reflect deeper market saturation or stronger competition from European automakers like Volkswagen, BMW, and even new Chinese entrants.
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Elon Musk’s Public Comments: Elon Musk stated he’s back to focusing full-time on Tesla and his other companies. While that might sound reassuring to investors, I believe sales performance carries far more weight than executive appearances. Leadership matters, but Tesla is a massive global business that should not be dependent on one personality.
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Tesla Is Bigger Than Elon: While Musk is undeniably a visionary, I think Tesla’s valuation should be based on fundamentals, not charisma. The stock often reacts more to his tweets and interviews than to delivery numbers or margins—something that makes me cautious.
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ARK Invest Is Trimming Exposure: Even Cathie Wood’s ARK Innovation ETF, a long-time Tesla bull, has recently sold some TSLA shares. While this doesn’t necessarily mean she’s turned bearish, it suggests even some of the most optimistic investors are becoming more cautious at current valuation levels.
Market Sentiment vs. Reality
Right now, I believe market sentiment around Tesla is overly optimistic. The company still trades at a premium valuation, as if it were immune to competition or macroeconomic trends. But none of that is true.
Yes, Tesla is a leader. But EV competition is heating up, interest rates remain high, and affordability is becoming a key concern for buyers—yet many investors remain fixated on its growth story without factoring in profitability risks.
Final Thoughts
Even though TSLQ dropped after I bought it, I see it as a strategic position in my portfolio. I’m not betting against Tesla permanently—just against what I believe is an unsustainable short-term rally.
In the long run, companies are valued by their ability to execute, innovate, and generate profits—not by the cult of personality or hype cycles. As much as I respect Tesla’s achievements, I believe the current market is pricing in too much perfection.
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