"Cannon to right of them,
Cannon to left of them,
Cannon behind them
Volley'd and thunder'd;"
-- "The Charge of the Light Brigade," Alfred, Lord Tennyson, 1854.

Bankrupt video store operator Blockbuster (OTC BB: BLOAQ.PK) is finally circling the drain. A last-ditch effort to save the company from total liquidation led to an open-market auction on Monday, and the bidders have started to line up.

No, this is not an April Fool's joke: Several suitors actually want to buy Blockbuster, become responsible for its crushing debt load, and presumably try to do something positive with the remains. That still doesn't change the simple fact that Blockbuster's shareholders are left holding a big, empty bag of zero, because the debtors get paid first and will become the de facto owners of whatever asset value remains.

So who are these masochists? Activist investor and longtime Blockbuster supporter Carl Icahn is first in line, having gotten the whole auction idea started with a "stalking horse bid" of $290 million back in January. The hedge fund conglomerate he represents here already holds a substantial chunk of Blockbuster's roughly $1 billion of debt notes.

The Wall Street Journal, citing its usual array of nameless sources, says that South Korean telecom SK Telecom also wants in on the bidding, and that DISH Network (Nasdaq: DISH) has placed another minimal bid just to get started. "People say" that other bidders are lurking in the shadows but cannot be identified at this point.

Why would DISH be interested? WSJ's sources say that the company wants to apply the well-known Blockbuster brand to its own video-on-demand services, and maybe even tie things together with Blockbuster's existing consumer electronics presence. Also, DISH and sister company EchoStar Communications (Nasdaq: SATS) are on a veritable bankruptcy-buyout spree these days, having snagged satellite operators DBSD North America and TerreStar Networks for pennies on the dollar. Good luck with that, I suppose.

Even with turnaround superstar Jim Keyes at the helm, Blockbuster couldn't beat back the dual assault of Coinstar (Nasdaq: CSTR) Redbox rental kiosks and Netflix (Nasdaq: NFLX) digital-and-disc solutions, and is paying the ultimate price for its commitment to physical storefronts.

The stock has been essentially worthless since Blockbuster declared bankruptcy last summer, which hasn't stopped shares from swinging between $0.04 and $0.60 per share on pure speculation. The time has finally come to set the price tag to a solid zero, regardless of who ends up winning next week's auction.

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