Time Warner (TWX: sentiment, chart, options) announced late this afternoon that it is asking its shareholders to vote for a reverse stock split in a move to boost its ailing market price and improve share liquidity. In a proxy filing on Monday, TWX will ask stockholders to vote on a reverse split of either 1-for-2 or 1-for-3, as determined by the board. The company said that its board believes that following the spin-off of Time Warner Cable, the market price for TWX shares may dip sharply lower due to the fact that Time Warner will have distributed all of its Time Warner Cable shares.

On the news, TWX closed nearly 6% lower but held above potential short-term support at the 8.50 level. For more on Time Warner, check out Time Warner Falls Despite Bernstein Upgrade.