Direxion Daily TSLA Bull 2X Shares (TSLL), an exchange-traded fund that seeks to provide 2x daily leveraged exposure to the performance of Tesla, Inc. (TSLA), plummeted by 5.34% on October 7, 2024, at 11:02 am. This sharp decline can be attributed to various headwinds facing Tesla, as reported in several news articles.
One of the significant challenges for Tesla was the downgrade by Jefferies, a prominent investment bank. Jefferies analysts downgraded Tesla from a "Buy" rating to "Hold," citing concerns about the company's hardware capabilities in handling AI tasks. This downgrade raised doubts about Tesla's ability to meet market expectations for its upcoming iPhone models, potentially impacting the company's growth prospects.
Additionally, GEICO, a subsidiary of Berkshire Hathaway, has decided to cease offering insurance for Tesla's highly anticipated Cybertruck. The decision stems from the vehicle's failure to meet GEICO's underwriting standards due to reported operational issues, such as a malfunctioning rear camera and other design flaws. While some problems have been addressed through recalls, others remain unresolved, casting a shadow over the Cybertruck's launch and Tesla's future product pipeline.