Disappointment with Tesla: Cybercab Presentation Weighs on Stock

Tesla suffered a setback on the stock market on Friday after the highly anticipated unveiling of the self-driving taxi "Cybercab" failed to meet investors' expectations. The company's shares dropped by up to 10%, leading to a loss of over 20% for the Direxion Daily TSLA Bull 2X Shares (TSLL). Elon Musk, Tesla's charismatic CEO, presented the futuristic-looking vehicle, which lacks a steering wheel and pedals, at an event near Los Angeles. While the design impressed the audience present, many investors remained critical, particularly because Musk announced that production would not begin until 2026. Investors had hoped for an earlier market launch, as Musk had previously made optimistic forecasts that were repeatedly postponed. Gene Munster, Managing Partner at Deepwater Asset Management, commented on the share price losses on Twitter, attributing them to the long wait for the Cybercab. This frustrated investors who had hoped for immediate results. Despite the disappointment, Munster remains optimistic about Tesla, believing that the Cybercab will ultimately reward investors' patience. The silence regarding a potentially more affordable electric vehicle model from Tesla also caused discontent. Munster believes that a cheaper model is likely still in the planning stages and may begin production by the end of 2025. However, this remains unspoken to avoid jeopardizing the sales of the existing Model 3 and Y. In total, nearly 270 million Tesla shares are held across 341 US-traded ETFs. The largest holder is the Invesco QQQ Trust, owning around 36 million shares, while the largest allocation within TSLL is an impressive 53%. On average, US ETFs dedicate 2.49% of their portfolios to Tesla.