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Tesla, AT&T, McAfee and Quibi - 5 Things You Must Know Thursday

Delays to a U.S. relief package, a surge in global coronavirus cases and allegations of election interference push stock futures lower; Tesla rises after quarterly free cash flow tops $1 billion for just the second time in its history.

Here are five things you must know for Thursday, Oct. 22:

1. -- Stock Futures Fall on Stimulus Doubts

Stock futures tumbled Thursday as a number of factors, including a delay to a U.S. relief package and a surge in coronavirus cases across the globe, weighed on Wall Street.

Contracts linked to the Dow Jones Industrial Average fell 34 points, S&P 500 futures were down 4 points and Nasdaq futures declined 14 points.

Stocks finished lower Wednesday as U.S. lawmakers continued to negotiate the terms of a stimulus plan for the ailing U.S. economy but investors doubted the legislation would be signed before Election Day. 

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were reported to have made progress in their negotiations and are expected speak again Thursday. Whatever plan they hatch, however, will face a Senate reluctant to approve a proposed package of about $2 trillion.

Denting sentiment also were a surge in coronavirus cases in Europe and a two-month high for Covid-19 hospitalizations in the United States. 

Accusations against Iran and Russia from the U.S. about election interference also raised fears about political instability leading into the Nov. 3 presidential election.

2. -- Tesla's Free Cash Flow Tops $1 Billion for a Second Time

Tesla  (TSLA) - Get Tesla Inc Report was rising nearly 5% in premarket trading Thursday after revenue growth and higher margins helped the electric vehicle company's quarterly free cash flow top $1 billion for just the second time in its history. 

Tesla Gains After Reporting Strong Cash Flows: 7 Key Takeaways

Tesla reported third-quarter earnings of 76 cents a share on revenue of $8.77 billion. Analysts were expecting the company to report earnings of 56 cents a share on revenue of $8.28 billion.

The company said in its third-quarter report that delivering 500,000 vehicles in 2020 “remains our target.” Tesla admitted, like it did when it released second-quarter earnings, that hitting this target “has become more difficult,” following Covid-related production halts earlier this year.

Tesla delivered 318,980 vehicles over the first nine months of 2020. Therefore, the company needs to deliver 181,020 vehicles in the fourth quarter to hit its target. 

Tesla posted third-quarter automotive gross margin of 27.7%, up from 22.8% a year earlier. 

The company said free cash flow was $1.4 billion in the third quarter, up sharply from a year-earlier $371 million.

The stock gained 4.62% to $442.15 in premarket trading Thursday.

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3. -- AT&T, Coca-Cola and Intel Report Earnings

AT&T  (T) - Get AT&T Inc. Report reported third-quarter adjusted earnings of 76 cents a share, 1 cent higher than analysts' estimates. Revenue of $42.34 billion fell 5 % from a year earlier but beat forecasts of $41.66 billion.

Coca-Cola  (KO) - Get Coca-Cola Company Report earned an adjusted 55 cents a share in the third quarter vs. estimates of 46 cents.

Earnings reports are also expected Thursday from Intel  (INTC) - Get Intel Corporation Report, American Airlines  (AAL) - Get American Airlines Group, Inc. Report, Southwest Airlines  (LUV) - Get Southwest Airlines Co. Report, Alaska Air  (ALK) - Get Alaska Air Group, Inc. Report, Mattel  (MAT) - Get Mattel, Inc. Report, Tractor Supply  (TSCO) - Get Tractor Supply Company Report, Union Pacific  (UNP) - Get Union Pacific Corporation Report, Kimberly-Clark  (KMB) - Get Kimberly-Clark Corporation Report, Northrop Grumman  (NOC) - Get Northrop Grumman Corporation Report, Dow Inc.  (DOW) - Get Dow, Inc. Report, Freeport-McMoRan  (FCX) - Get Freeport-McMoRan, Inc. Report and VeriSign  (VRSN) - Get VeriSign, Inc. Report.

The economic calendar in the U.S. Thursday includes weekly Jobless Claims at 8:30 a.m. ET and Existing Home Sales for September at 10 a.m.

4. -- McAfee's IPO Raises $740 Million 

McAfee, the cybersecurity company founded by tech eccentric John McAfee, raised $740 million after its initial public offering of 37 million shares was priced Wednesday night at $20 a share.

The shares had been marketed at $19 to $22.

McAfee will offer 31 million shares for sale, while existing shareholders will offer 6 million.

The stock will begin trading Thursday on the Nasdaq under symbol "MCFE."

In the six months through June 27, McAfee posted profit of $31 million, swinging from a loss of $146 million a year earlier. Revenue rose 9% to $1.4 billion from $1.29 billion.

John McAfee founded McAfee Associates in 1987 and ran it until 1994, when he left the company.

McAfee’s anti-virus software was a market leader along with Norton in the 1990s and 2000s. It was sold to Intel for $7.7 billion in 2010.

5. -- Quibi Is Shutting Down

Quibi, the short-video app that was led by former Hewlett-Packard Enterprise CEO Meg Whitman and former Walt Disney Pictures Chairman Jeffrey Katzenberg, said it would be shutting down and selling its assets, just six months after it launched.

Quibi was downloaded more than 700,000 times on its first day. But its executives said in a letter posted online Wednesday that "Quibi is not succeeding." 

The company placed a large part of the blame for its failure on the coronavirus pandemic.

Quibi failed "Likely for one of two reasons: because the idea itself wasn't strong enough to justify a standalone streaming service or because of our timing," Whitman and Katzenberg wrote. "Unfortunately, we will never know but we suspect it's been a combination of the two."