You did the right thing. Unless your swimming in expendable cash, it's crazy to short without knowing the true scope of involvement. It could've just as easily been a scam which, with or without inside involvement, could have turned and shot up as pps manipulation continued like it did with Jammin Java or Rudy Beverages a few years back. If that happens you'd better cut your losses as fast as you can or get screwed. It's a dangerous game to start playing cause a few successes will embolden you, possibly leading you to a slaughter. At least with straight buys, you only risk losing what you put down.