Goodbye, Borders (OTC: BGPIQ). You've closed your final chapter and it's time to move on. There's no cliffhanger ending that could raise hopes of a resurrection.

The venerable chain of bookstores failed to find a buyer in bankruptcy proceedings and is moving on to total liquidation. Don't pass Go, don't collect $200 -- just go away. Famed liquidation specialists Hilco and Gordon Brothers are handling the final sell-off of Borders' assets, pending court approval of the plan. Everything must go!

And yet, checking up on the stock ten minutes after this morning's opening bell, shares were down 50% on more than double the average trading volume for a full day. Borders shares keep trading on the Pink Sheets like zombies looking for fresh brains. Don't let them get yours.

Zombie protection plan
The fact is, those shares aren't worth the paper they're printed on. If all goes well, Borders expects -- but can't exactly guarantee -- that vendors will get paid for "all expenses incurred during the bankruptcy cases." Never mind paying off the $345 million in accounts payable and $281 million of "other non-current liabilities" (mostly leases) that Borders had outstanding as of its last SEC report. Much of that debt has been written off as part of the bankruptcy plan, and many lenders and vendors are left holding a large bag.

And shareholders are at the very bottom of the reimbursement totem pole -- far below debt owners and suppliers. This stock is no more. It has really gone to zero, and only hustlers and gamblers would have you believe otherwise.

The same goes for video renter Blockbuster, which still sees plenty of trading action even after being sold for pennies on the real-estate dollar to DISH Network (Nasdaq: DISH). That company was never liquidated, but there's absolutely nothing left for shareholders. Even Circuit City remains active on the Pink Sheets, albeit at minuscule volumes and near-zero share prices, nearly three years after going to the great gig in the sky.

I love you for sentimental reasons
Look, I get it -- Borders is a dear and familiar name, perhaps a big part of your childhood or of raising your own kids. There's sentimental value in the name, the stores, the smell of coffee from the corner cafe. But none of that creates any value for investors.

Far from just pining for the fjords, Borders is dead and it ain't coming back, killed by an unbearable debt load and a lack of digital strategy in the age of Amazon.com (Nasdaq: AMZN) and even Barnes & Noble (NYSE: BKS) embracing new methods of buying and consuming the written word.

It's hard to let go of stocks you once believed in, even when facing incontrovertible evidence that it's all over. Any Borders shares you're holding today would be better off in the hands of some street-hustling day trader while you redeploy whatever salvage value you can get.

Sleep with one eye open
Some supposed turnaround stories never pan out, as shown by Borders, Blockbuster, and Circuit City. Don't get blindsided by the next bankruptcy. The signs are often telltale:

  • Mortgage insurers PMI Group (NYSE: PMI) and MGIC Investment (NYSE: MTG) are facing a similar suffocating debt and dwindling cash situation that snuffed out Borders -- exacerbated by ever-rising mortgage default rates and related insurance claims. Handle with extreme care.
  • Shares of mobile marketing maven Motricity (Nasdaq: MOTR) have lost some 67% of their value over the last six months and still face a massive horde of short-sellers -- all for good reason. The company has cash to spare, but only because it keeps issuing new shares when balances run low.

Be an investor, not a speculator or a scam artist. Let go of your worthless papers before they're entirely dead. Even a zombie seems to be worth something on the open market, so you might as well take advantage of that insanity.

To get you started on a more profitable track, here are some ideas on where to invest next:

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, or follow him on Twitter or Google+. Our Foolish disclosure policy loves its Norwegian Blue and would never nail it to a perch.