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Intersections Inc. Message Board

  • stormfront2020 stormfront2020 Sep 5, 2013 10:43 AM Flag

    Is INTX A Master Limited Partnership ?

    I'm considering buying, but if it's not an MLP, I'd be concerned about it's high dividend payout ratio.


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    • INTX is not a MLP. You are correct to be concerned by its high dividend rate. It is probably unsustaianable over the longterm. The dividend rate was set when INTX had a good deal with Bank of America. Advertisements for INTX's services (protection against identity theft) were sent out with every BOA credit card. People could elect to purchase INTX's services, and have the monthly fee incorporated into their credit card bill where they didn't see the costs. Customers referred by BOA were the majority of INTX's customer base.

      Due to a change in law, BOA terminated this arrangement. INTX still services the customers that it previously signed up with BOA, but BOA no longer advertises the services to new customers. (I'm not a lawyer, but as I understand it, the old arrangement with BOA would still be legal, but BOA terminated the arrangement because it was scared of potential legal liablities since there had been succesfual lawsuits against other banks advertising similar services). Currently, INTX is still profitable due to legacy BOA customers, but it is experiencing a slow to moderate bleeding away of its current customers, and having a difficult time finding replacement customers.

    • what is a MLP? INTX is a Corporation

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