(1) In September, Cool announced increased revenues, improving cash flow, and raised guidance for FY 2010. The stock quickly rose from the neighborhood of $1.60 to $1.90 per share.

(2) In mid-September (at $1.90 share), the company raised $9.6MM in cash, by issuing new shares to a private investor or investors at an effective price of $1.50/share. There was no immediate need for the cash, and both the dilution involved and the announcement itself were shockers to COOL's shareholders.

(3) Based on the previous-day closing price of $1.91, the number of new shares created, and the amount of cash suddenly added to company coffers, the "fair" price for COOL stock calculates to somewhere around $1.70 per share.

(4) Following the announcement of the additional financing, Cool stock fell quickly to the $1.50 range, stabilized there for a week or so, but has since sold off steadily to the $1.00 range -- a further 50% haircut in a month.

(5) The sell-off has been accompanied by large daily trading volumes (relative to past history), and the recent appearance on this and other COOL chat boards of several aggressive "gloom and doom" posters, who continue to suggest that further deterioration in the PPS is inevitable.

(6) The company has said nothing in the past six weeks about why they did the deal, who the private investor(s) is (are), or what they plan to do with the cash. But they have continued to issue 1-3 press releases per week about new or expanded software titles, and they have not modified their optimistic guidance in any way.

Finally, and FWIW, I had a few COOL shares before mid-September, but have added 2000 shares at each lower nickel from $1.50 down to $1.00. I now have 27K shares at an average of just under $1.35, and I will continue to buy 2000 shares at each lower nickel until this short attack runs its course and saner valuations return. GL to all, do your own DD, and spend your dry powder wisely.