For the past year, Circuit City (NYSE: CC) has done a nice job short-circuiting its shareholders. But lately, there has been hope.

In fact, today the company essentially said it's "in play" for a sale. That is, it will allow Blockbuster (NYSE: BBI) – which has expressed buyout interest – to check out the books.

Although, it helped that billionaire activist investor, Carl Icahn, has been pushing for a deal. In a letter to Circuit City, he said he'll write a check to buy the company if Blockbuster can't come up with sufficient financing.

Yet, the question lingers: does a combination makes sense? After all, both Circuit City and Blockbuster are ailing. So why would a merger of two duds turn into a great entity? I seriously doubt it's something that frightens the folks at Best Buy (NYSE: BBY).

Then again, Circuit City may really be allowing itself to be sold to another player. For example, the company put an end to its proxy fight with Wattles Capital Management, which got three board seat. Oh, and Circuit City has retained Goldman Sachs (NYSE: GS) to explore strategic alternatives.

Thus, for the most part, Icahn is playing his typical role as the instigator. Keep in mind that he can be pretty tough to negotiate with – especially when you're selling your company to him.

And, so far in today's trading, Circuit City's shares are up 8%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.