Borders Group (BGP) tanks after deadline extension on Ackman deal

Shares of Borders Group (NYSE: BGP) are down 26% to 39 cents per share today after the company announced an agreement to "extend the expiration date of the previously announced Borders option to "put" its U.K.-based Paperchase gifts and stationery business to Pershing Square for $65 million, subject to certain conditions."

The company also extended the deadline for its repayment of a $42.5 million loan made to to the company by Pershing Square, a hedge fund run by superstar value investor William Ackman.

Last month Borders abandoned its efforts to sell itself but with its balance sheet presenting a serious problem in the face of tanking sales, investors are incredibly skeptical about the company's future. The company's market cap of less than $25 million indicates that many investors believe that the company is a candidate for bankruptcy court.

While the economic smackdown certainly isn't Borders' fault, the company has made an enormous number of strategic blunders, starting with investing millions of dollars in an e-commerce site that will never be a serious threat to larger rivals.