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Twitter bans Trump

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Less than 24 hours after President Trump was allowed back on Twitter, the social media platform announced on Friday afternoon, January 8, that it was permanently suspending his @realdonaltrump account “due to the risk of further incitement of violence.” The decision followed several more tweets warning that his supporters would not be “disrespected” and saying he would not attend the inauguration of Joe Biden.

The move was the latest in a chain of shutdowns that started after pro-Trump loyalists invaded the Capitol building on Wednesday, and an unapologetic Trump continued repeating unfounded conspiracy theories about the election being stolen. 

Facebook and YouTube began on Wednesday by deleting a video in which Trump repeated his claims and told his followers: “Go home. We love you, you’re  very special … I know how you feel, but go home and go home in peace.” Twitter then blocked that video and two other messages for violating its recently implemented civic integrity policy, and locked him from tweeting unless he agreed to delete the videos. Even then, he had to serve a 12-hour timeout before he could tweet again. Facebook and Instagram then announced a 24-hour ban, which they soon extended indefinitely—or at least until after Joe Biden’s inauguration. Facebook argued that Trump was violating their policies against “real-world harm.” Twitch, the streaming platform, and Snapchat also made similar moves. 

“The degree to which this changes the circulation of information [can be] easily overstated”

Will Partin, Data & Society

Preventing the president’s accounts from posting will reduce the ease with which he can spread certain messages, but it may not dramatically shift the online conversation, says Will Partin, a disinformation research analyst at Data & Society.

“While I doubt Mr. Trump and his closest allies are happy about being blocked … the degree to which this changes the circulation of information,” he says, can be “easily overstated.”

Banning Trump from posting on social platforms does have the immediate and obvious impact of decreasing his ability to communicate directly with his followers. But it does not suddenly dismantle the ecosystem of online extremism, or stop networks like Fox News and Newsmax that have fed conspiracy thinking and widespread, growing distrust of government. Nor does it undo the white supremacy that has characterized America from its founding. 

Even if it doesn’t immediately solve the larger problems leading to this week’s assault on the Capitol, however, deplatforming Trump will have consequences for Trump today and in the future, say disinformation experts. 

Removing the “bells and whistles” of big platforms

“A large part of Trump’s power comes from how easy he is to hear,” says Emerson Brooking, a resident fellow at the Atlantic Council’s Digital Forensic Research Lab. “Many of his supporters hear him directly on Twitter.” And the media expands this reach dramatically: a Harvard study from earlier this year found that mainstream news outlets are the largest amplifier of White House disinformation, since “journalists, all of whom are on Twitter, quickly work his statements into their broadcasts,” he adds. 

That means that losing access to the mainstream platforms will reduce his audience and dilute the reach of his statements, as the deplatforming of far-right figures like Alex Jones and Milo Yiannopoulos shows. Yiannopoulos, who was banned in 2016 for his repeated racist abuse of actress Leslie Jones, complained about the effect that deplatforming had on his income.  

“Part of it is because people just don’t remember to go to other websites,” says Joan Donovan, the research director at Harvard’s Shorenstein Center on Media, Politics, and Public Policy. Donovan, a regular MIT Technology Review contributor, points out that the mainstream platforms have built in “bells and whistles” designed to minimize friction and make engaging with content as easy as possible. If Trump were limited to a niche service with limited design and features, such as Parler, she says, it would create an additional barrier to sharing his content. 

Communicating through proxies—with smaller followings

Even during @realdonaldtrump’s day-long absence from Twitter, Trump was not entirely silent on the platform. On Thursday, while the president was still unable to post from his personal account, White House social media director Dan Scavino tweeted a statement from the president that conceded the election—but did not concede his claim that the election was stolen. It was picked up by the media, but with 40,000 retweets and 100,000 likes, it fell far short of the hundreds of thousands that typically engage with each of Trump’s own missives.

As a result, it is “casual supporters” that Trump is most likely to lose if he is permanently banned, says Brooking; they “will hear from him less frequently,” which could mean that that “in time, they may become less wedded to the conspiracy theories and falsehoods that he has made a habit of spreading.”

Of course, it depends on whom he’s speaking through. Much of his disinformation around voter fraud, for example, came from a wider “network of content creation,” says Donovan; that is, individuals close to the president who each have large followings themselves, including Rudy Giuliani, Sidney Powell, and Lin Wood, among others. “These are the accounts that I’m most worried about, because these are the people that are incentivized … because they’re making money off of this,” she says.

 A Trump “digital media empire” could also be blocked

One route around losing his perch on major social media sites could be for Trump to spin up his own systems to talk directly to supporters. The campaign app for his failed campaign for reelection, for example, had its own news and notification system, which often shared questionable or disproven stories that emphasized the president’s talking points.

And back in 2016, when it looked certain that his first presidential campaign would fail, Trump reportedly was already in discussions to turn his massive follower base into a profitable cable news empire. Since November’s election, there have been rumors that he might start a digital media empire that would include an online streaming channel. 

Even if his deplatforming accelerated these plans, Trump could continue to be marginalized if his channel’s links were blocked on social media or if internet hosting companies or other service providers declined to provide him support. After the Unite the Right rally in Charlottesville, Virginia, which resulted in the murder of Heather Heyer, website infrastructure provider Cloudflare terminated its services to The Daily Stormer, effectively taking the right-wing website offline. 

“They’re going to keep pressing forward” 

After the assault on Congress and subsequent social media bans, Trump’s supporters have to decide “whether they’re wholly committed to violence or to get off the train,” says Bennett Clifford, who studies violent extremism at George Washington University’s Program on Extremism. 

For those committing to violence, Trump may have already become a remote figurehead and rallying point rather than a leader in the ecosystem. 

Of these individuals, “it really doesn’t matter what he does now. They’re going to keep pressing forward,” Brooking said, in a briefing call with reporters. “And it will be more expressively anti-state than it was before, and probably more prone to political violence.”

This outcome is not inevitable, however. Brooking says that “financial and social costs can become high enough” for the relatively small group of disinformation influencers to stop peddling their conspiracy theories. He counts around 100 people who contribute heavily to the spread of constant disinformation, and figures that without them “more Americans will be able to be brought into the fold [of the mainstream] and be deradicalized.” 

Deplatforming also goes beyond social media. Business groups were quick to condemn Trump and his supporters’ actions on Wednesday, and some companies have already taken steps. On Thursday, Shopify, the e-commerce platform that powers over one million online stores, permanently removed two stores affiliated with Trump. PayPal soon followed suit, shutting down the account of a group that paid for Trump supporters to travel to Washington and join the siege on the Capitol. 

And the media’s shifting coverage will play an important role. While news organizations found it hard to ignore Trump when he was president of the United States, they may find it easier when he isn’t—especially if they intentionally decide to prevent amplification of his message, as networks have increasingly done since he began making baseless claims about election fraud. 

“What then?” asks Donovan. “Is he a guest on Infowars?” 

A brief return to Twitter

Trump’s return to Twitter was short-lived. Thursday afternoon, the president came back online after deleting his offending tweets and serving his temporary suspension, with a pre-recorded video message in which he said he was committed to a peaceful transfer of power to Joe Biden. In the same message, he lied about having immediately deployed the National Guard, when in fact he initially resisted.

If there were any lingering questions about whether his recent experiences might soften his tone, his initial tweets on Friday provided the answer. His first described his supporters as “American patriots” who would have a “giant voice long into the future” and should not be “disrespected or treated unfairly,” and his second announced that he would not attend his successor’s inauguration. 

Apparently, Twitter agreed, permanently suspending @realdonaldtrump hours later. 

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Smart lock maker Latch teams with real estate firm to go public via SPAC

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This week, Latch becomes the latest company to join the SPAC parade. Founded in 2014, the New York-based company came out of stealth two years later, launching a smart lock system. Though, like many companies primarily known for hardware solutions, Latch says it’s more, offering a connected security software platform for owners of apartment buildings.

The company is set to go public courtesy of a merger with blank check company TS Innovation Acquisitions Corp. As far as partners go, Tishman Speyer Properties makes strategic sense here. The New York-based commercial real estate firm is a logical partner for a company whose technology is currently deployed exclusively in residential apartment buildings.

“With a standard IPO, you have all of the banks take you out to all of the big investors,” Latch founder and CEO Luke Schoenfelder tells TechCrunch. “We felt like there was an opportunity here to have an extra level of strategic partnership and an extra level of product expansion that came as part of the process. Our ability to go into Europe and commercial offices is now accelerated meaningfully because of this partnership.

The number of SPAC deals has increased substantially over the past several months, including recent examples like Taboola. According to Crunchbase, Latch has raised $152 million, to date. And the company has seen solid growth over the past year — not something every hardware or hardware adjacent company can say about the pandemic.

As my colleague Alex noted on Extra Crunch today, “Doing some quick match, Latch grew booked revenues 50.5% from 2019 to 2020. Its booked software revenues grew 37.1%, while its booked hardware top line expanded over 70% during the same period.”

“We’ve been a customer and investor in Latch for years,” Tishman Speyer President and CEO Rob Speyer tells TechCrunch. “Our customers — the people who live in our buildings — love the Latch product. So we’ve rolled it out across our residential portfolio […] I hope we can act as both a thought partner and product incubator for them.”

While the company plans to expand to commercial offices, apartment buildings have been a nice vertical thus far — meaning the company doesn’t have to compete as directly in the crowded smart home lock category. Among other things, it’s probably a net positive if you’re going head to head against, say Amazon. That the company has built in partners in real estate firms like Tishman Speyer is also a net positive.

Schoenfelder says the company is looking toward such partnerships as test beds for its technology. “Our products have been in the field for many years in multifamily. The usage patterns are going to be slightly different in commercial offices. We think we know how they’re going to be different, but being able to get them up and running and observe the interaction with products in the wild is going to be really important.”

The deal values Latch at $1.56 billion and is expected to close in Q2.

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AT&T may keep majority ownership of DirecTV as it closes in on final deal

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A DirecTV satellite dish mounted to the outside of a building.

Enlarge / A DirecTV satellite dish seen outside a bar in Portland, Oregon, in October 2019. (credit: Getty Images | hapabapa)

AT&T is reportedly closing in on a deal to sell a stake in DirecTV to TPG, a private-equity firm.

Unfortunately for customers hoping that AT&T will relinquish control of DirecTV, a Reuters report on Friday said the pending deal would give TPG a “minority stake” in AT&T’s satellite-TV subsidiary. On the other hand, a private-equity firm looking to wring value out of a declining business wouldn’t necessarily be better for DirecTV customers than AT&T is.

It’s also possible that AT&T could cede operational control of DirecTV even if it remains the majority owner. CNBC in November reported on one proposed deal in which “AT&T would retain majority economic ownership of the [DirecTV and U-verse TV] businesses, and would maintain ownership of U-verse infrastructure, including plants and fiber,” while the buyer of a DirecTV stake “would control the pay-TV distribution operations and consolidate the business on its books.”

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Fintechs could see $100 billion of liquidity in 2021

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Three years ago, we released the first edition of the Matrix Fintech Index. We believed then, as we do now, that fintech represents one of the most exciting major innovation cycles of this decade. In 2020, all the long-term trends forcing change in this sector continued and even accelerated.

The broad movement away from credit toward debit, particularly among younger consumers, represents one such macro shift. However, the pandemic also created new, unforeseen drivers. Among them, millennials decamped from their rentals in crowded cities to accelerate their first home purchase, to the benefit of proptech companies and challenger mortgage players alike.

E-commerce saw an enormous acceleration in growth rates, furthering adoption of online payments platforms. Lastly, low interest rates and looming inflation helped pave the way for the price of Bitcoin to charge toward $30,000. In short, multiple tailwinds combined to produce a blockbuster year for the category.

In this year’s refresh of the Matrix Fintech Index, we’ll divide our attention into three parts. First, a look at the public stocks’ performance. Second, liquidity. Third, we highlight one major trend in the sector: Buy Now Pay Later, or BNPL.

Public fintech stocks rose 97% in 2020

For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index. While the underlying performance of these companies was strong, the pandemic further bolstered results as consumers avoided appearing in-person for both shopping and banking. Instead, they sought — and found — digital alternatives.

For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index.

Our own representation of the public fintechs’ performance is the Matrix Fintech Index — a market cap-weighted index that tracks the progress of a portfolio of 25 leading public fintech companies. The Matrix fintech Index rose 97% in 2020, compared to a 14% rise in the S&P 500 and a 10% drop for the incumbent financial service companies over the same time period.

 

2020 performance of individual fintech companies vs. SPX

2020 performance of individual fintech companies versus S&P 500. Image Credits: PitchBook

 

Fintech incumbents and new entrants vs. the S&P 500

Fintech incumbents and new entrants versus the S&P 500. Image Credits: PitchBook

E-commerce undoubtedly stood out as a major driver. As a category, retail e-commerce grew 35% YoY as of Q3, propelling PayPal and Shopify to add over $160 billion of market capitalization over the year. For its part, PayPal in the third quarter signed up 15 million net new active accounts (its highest ever).

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