NEW YORK (CBS.MW) -- Shares of AT&T plunged to a 15-year low in the wake of news that Ma Bell plans to conduct a reverse stock split once the sale of its cable unit to Comcast is complete.

At day end, AT&T (NYSE:T) closed down $1.15, or 8 percent, to $13.27 on heavy volume of 36 million shares. It was the fifth most active issue on the New York Stock Exchange.

While the move is aimed at boosting the "face" value of AT&T stock, Wall Street has long considered a reverse split a sign of weakness. Analysts view the news as further proof that AT&T expects its core long-distance business to remain under competitive stress.

Under the plan, stockholders would receive one share for every five shares that they own.

If the Comcast deal were to be completed today, that would reduce the value of AT&T's remaining phone business to about $4 a share. Investors currently assess the company's cable business at about double the value of its phone operations.

The reverse stock split, based on Thursday prices, would put the value of AT&T stock at close to $20 a share.

While the value of each investor's holdings wouldn't change, the move would give AT&T stock a higher "face" value and offer some psychological comfort to equity owners. In addition, investors have typically taken a dimmer view of stocks that trade below $5, particularly on the NYSE.

Indeed, some large institutions have rules preventing them from owning stocks that trade below that level. Analysts suggest AT&T wants to ensure that big investors aren't forced to dump more shares and put further downward pressure on Ma Bell's stock.

AT&T now has about 3.6 billion common shares. It sharply boosted the number of shares outstanding amid a series of acquisitions from 1998 to 2000 aimed at reshaping the company's business - a gamble most analysts now consider a failure.

Now that most of the acquired assets have been sold off, "we think a reverse stock split makes sense," said AT&T spokeswoman Eileen Connolly.

The sale of AT&T's cable business is expected to be completed later this year.