What happened

Following the release of disappointing third-quarter results and the declarationof another generous dividend payment, shares of Frontier Communications (NASDAQ:FTR) crashed hard on Wednesday morning. Share prices plunged 23.8% lower as of 10:30 a.m. EDT.

So what

Frontier's top-line sales clocked in at $2.25 billion, flat when compared to the year-ago period and in line with Wall Street's expectations. On the bottom line, net losses increased from $0.04 to $1.19 per share, worse than the analyst consensus estimate of a $1.15 loss per share.

Separately, the regional telecom also announced a dividend payment of $0.60 per share, which works out to a 26% yield at today's share prices.

A $50 bill on fire.

Image source: Getty Images.

Now what

The stock has now lost more than 80% of its market value so far in 2017, triggering a 15-for-1 reverse stock split in July. The company is still generating positive free cash flows but customers are fleeing Frontier's services in every reportable segment, including the supposedly bulletproof broadband internet segment.

CEO Dan McCarthy is keeping a stiff upper lip, noting that the customer losses are "stabilizing" across the board, but I'm not buying it. Frontier is a business in free fall, and that excessive dividend yield is just the most glaring red flag atop this toxic value destroyer.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.