Windstream Holdings (Nasdaq: WIN) Just Rewrote the Telecom Industry Playbook

Michael A. Robinson

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 had you there first.

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…

Michael A. Robinson

About the Author

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Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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