Pier 1 Imports Inc finally came to its senses and dropped its much-criticized bid for Cost Plus Inc, prompting a nearly 12-percent jump in its stock price and an upgrade by an analyst.

Shares of Pier 1 surged after the home furnishings company withdrew its bid, saying it was unlikely it would be able to acquire a majority interest in Cost Plus “at a price that would make sense” for shareholders.

D.A. Davidson upgraded Pier 1 to “buy” from “neutral” after the news. Since revealing its bid on June 9, Pier 1’s stock had plunged 23 percent through Tuesday.

“Management can now begin to move from defending an ill-timed and ill-orchestrated action to continuing to focus on its turnaround,” Raymond James analyst Budd Bugatch said in a research note. “More importantly, it can begin rebuilding its credibility that was unfortunately damaged by this affair.”

Pier 1’s $88.4 million all-stock bid was slammed by analysts who said it would distract Pier 1 as it was seeking to turn around its own business. The operator of Cost Plus World Markets rejected Pier 1’s proposal, saying it was not attractive financially or strategically.

D.A. Davidson upgraded Pier 1 to “buy” from “neutral” after Pier 1 withdrew its bid.

While the M&A market has seen a surge in big-brand strategic dealmaking — ranging from the merger of Mars and Wrigley, to Hewlett-Packard and EDS, and InBev’s bid for Anheuser-Busch — there have been a few flailing attempts, too.

“There are companies that are less-well positioned and less likely to prosper making unsolicited or hostile bids for even weaker companies. These are companies that are sucking wind that are just trying to buy revenues and amass something larger just to hang on,” said one head of mergers and acquisitions at a U.S. investment bank.

Now, when will Blockbuster Inc come to its senses and walk away from its offer for Circuit City Stores Inc? Shares of Blockbuster rose nearly 13 percent on Tuesday amid investor speculation that the movie rental company’s offer for Circuit City may be dropped. It rose another 3.8 percent on Wednesday.

Circuit City posted a wider-than-expected quarterly loss last week and said its cash position fell to $92.2 million from $364.1 million a year earlier. Yet, Circuit City investor Mark Wattles told Reuters on Tuesday that Circuit City has received buyout interest from several strategic and financial bidders and a sales agreement could be announced over the next month.

Investors seem to be hoping that Blockbuster isn’t one of them.