This story has been updated below.

Windstream Holdings Inc. (NASDAQ: WIN) has been a controversial stock for more than just a little while. Now the communications and technology solutions provider is transforming its structure by spinning off assets into a publicly traded real estate investment trust (REIT). The move will create two companies, and so far it seems that shareholders are enjoying the news.

The company announced on Tuesday morning that it will spin off certain telecommunications network assets into an independent, publicly traded REIT. This will allow the company to accelerate network investments and maximize shareholder value. The REIT will own Windstream’s existing fiber and copper network and other fixed real estate assets, and it plans to expand its network and diversify its assets through acquisitions.

Keep in mind that Windstream is one of those companies with a zany dividend yield of almost 10%. The REIT will raise some $3.5 billion in new debt, and that will be used to repay existing Windstream debt to effect the transaction.

UPDATE (10:30 a.m. Eastern Time): If you think this is a one-off piece of news, just look at our new story expanding this news driving AT&T, Verizon, and others much higher on the potentiality that they could attempt the same sort of effort for a REIT conversion.

Windstream expects to retire approximately $3.2 billion of debt as part of the transaction, which should deleverage the books to about 3.3 times debt to adjusted operating income before depreciation and amortization (OIBDA) immediately at closing.

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As far as how this is enacted, it is to be a tax-free spin-off that enables Windstream to lower its debt by approximately $3.2 billion while increasing free cash flow. The NewCo REIT will offer an attractive dividend to shareholders, and its growth will come from lease escalation, capital investment and acquisitions. Tuesday’s news is after Windstream received a favorable private letter ruling from the Internal Revenue Service.

What should stand out here is that Windstream’s stock was already close to 52-week highs. While at $10.53 as of Monday’s close, its 52-week range was $7.18 to $10.57. Shares were indicated north of $12 in early bird trading.

This is a game-changing event for Windstream. The company is a member of the S&P 500, and it is the index’s highest yielding stock for investors. Windstream was also one of the most difficult for investors to analyze for dividend payouts staying close to that 9.5% mark. Its $1.00 annualized dividend payout compares to earnings per share estimates from Thomson Reuters of $0.31 in 2014 and $0.40 in 2014.

It looks as though Bernstein was right when it started coverage on Windstream with an Outperform rating. Still, this routinely shows up among the most-shorted of all Nasdaq stocks.

Windstream is transforming — into something. As far as what, that has yet to be seen. So far it seems as though Windstream’s shareholders more than like the transformation.

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UPDATE: As of 10:30 a.m. Eastern Time, Windstream short sellers were getting gutted. Windstream had a whopping 87.3 million shares in its mid-July short interest. That is over 13 days to cover, and the trading reaction had shares up 20.8% at $12.74 on just over 48 million shares versus an average daily volume of almost 7 million shares.

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