ALL telecoms are down today.. seems like when one is down, they are all down so I wouldn't sell CTL. Now that CTL will eventually partner with VZ for the v-phone, it is an additional money maker for the company.
To be fair to the stock, it is trying to hold up in the middle of horrendous market. You couldn't say one way or another at this juncture. It is weak post dividend and it is weak due to the earnings release of qwest (and the pending merger). However, I don't think you can argue completely this is a sell off due its fundamentals. From my perspective, the short trade appears to be about done. However, you have to watch out for an analyst downgrade. If that doesn't happen, then it should hold at $40. If I were holding, I would still sell. There is better things to do with your money than risk it.