As Blockbuster's stock plummeted about 9.9% Monday to close at $2.82 per share, the Street might have been a bit concerned that the company's proposed shareholder rights offering to finance a possible deal is unlikely to come to fruition. Icahn reportedly will backstop the planned offering, said Mark Wattles of Wattles Capital Management, the 6.5% Circuit City stakeholder who earlier this month pushed for the retailer to hire an investment bank to evaluate a potential buyer and urged for the ouster of Circuit City chairman and CEO Philip Schoonover.
Icahn, a member of Blockbuster's board of directors, holds some considerable sway at the company with 16% of its Class A shares and nearly 8% of its Class B shares, which hold two votes per share. "Icahn has 16% -- if he wants the deal financed, the deal will be financed," a source said.
Additional coverage will come later in The Daily Deal and on TheDeal.com. - Michael Rudnick
How will Blockbuster Inc., which held just about $185 million of cash on its balance sheet as of the fourth quarter ended Jan. 6, finance what could be up to a $1.4 billion purchase of Circuit City Stores Inc.? How about a jolt of electricity from billionaire Carl Icahn? 
