What happened

Shares of Uniti Group (NASDAQ:UNIT) fell 51.6% in February, according to data from S&P Global Market Intelligence. The plunge happened when regional telecom Windstream Holdings (NASDAQ:WINMQ), Uniti's largest customer and former parent company, filed for bankruptcy.

So what

Windstream's business has been unhealthy for years, which is why the company spun off Uniti as a separate company in the first place. So when a federal judge ruled that some of Windstream's debts were in default because of the Uniti split in 2015, it was simply a long-awaited final push over the edge. Windstream's stock closed 61% lower that day, dragging Uniti along for a 37% single-day plunge.

Check out the latest earnings call transcript for Uniti Group.

Young man doing a facepalm while looking at his phone.

Image source: Getty Images.

Now what

Windstream accounts for more than half of Uniti's total revenue, so it's no surprise to see investors taking Windstream's failure seriously. From here, Uniti hopes to untangle itself from Windstream's burning wreckage and move on to a more stable future with a rebuilt client portfolio. The company's networking infrastructure should provide a platform for a serious rebound, but it won't be easy, and Windstream's financial troubles might change Uniti's balance sheet as well.

There's just no telling at this point. Personally, I'm holding on to my Uniti shares for dear life through this long-expected storm at a 35% loss over a four-year holding period. A return to full health will take years, and Uniti may be headed in the other direction if Windstream's fallout becomes too much to handle.

Let's just say, I'm not backing up the truck to buy more Uniti shares at these lower prices. That 29% dividend yield is nothing but a big, red flag. I'm already putting enough of my capital at risk here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.