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Last week, tiny Windstream Holdings Inc. (Nasdaq: WIN) unveiled a "game-changing" strategy that turned the entire telecom sector upside down.
The rural telephone company announced a breakup plan that will transform the company from a sleepy dividend payer into a deal-making broadband firm.
WIN shares jumped a stunning 12.4% in a single session. And telecom stocks soared across the board as folks grasped the sector-wide windfall opportunity this makeover strategy has created.
Several rural carriers experienced single-day price spikes of as much as 16%. And even the big boys – AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) – reaped the benefits.
We recommended Windstream in Strategic Tech Investor back on May 2. And folks who followed our lead are now sitting on a 29% gain.
But this is just the start. With this single move, the Little Rock, Ark.-based Windstream has rewritten the rules on telecom competition. Rivals will have to react or fall behind.
Now it's time to look at where Windstream will take the sector next: The money that's been made to date will be dwarfed by what's to come.
You just have to understand how to play this…
WIN Just Gave Investors a Telecom "Twofer"
Windstream's "gift" is one of our favorites – a "spin-off."
It plans to spin off its network assets, including fiber-optic and copper lines, into an independent, publicly traded real estate investment trust (REIT).
Windstream operates in 48 states and 86 metropolitan markets. It has 115,000 miles of high-speed fiber-optic cable for web and voice service, with broadband accounts accounting for nearly three-fourths of sales. It runs 26 data centers throughout the United States and counts more than 600,000 business clients and 3.3 million residential consumers.
Most REITs, securities that sell like a stock on the major exchanges, focus on commercial real estate such as office buildings, apartments, warehouses, hotels, and shopping centers. And they make their money through rent.
This, however, is a highly unique and unusual deal. Here's why…
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.