Here is one possible reason for the sell-off. While the CEO has received great interest, there were also some concerns as some investors were not entirely convinced of the video quality. What the software does is detect the CPU and connection parameters (speed, etc.) and adjust the quality accordingly, but that might not be working properly in all instances. Here is CEO Vestergaard:

It automatically downgrades the quality to meet the CPU and bandwidth abilities of your device. It appears there could be a bug where we are detecting a lower capability that what is available. The feedback has been great, except concerns from some investors who have encountered this bug.

But remember, this is in beta, it's ment to detect bugs and iron them out.

You could try for yourself:  http://dsny.com/g2/showcase.php

The stock is not getting to levels where no value at all for Clipstream G2 or the digital watermarking is discounted..