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MightyWords offers digital versions of books and texts that can be downloaded to personal computers.

Fatbrain (Nasdaq: FATB), which is making MightyWords an independent, privately-held company, said it had secured $36 million of investments in the unit, including $20 million from Barnes and (Nasdaq: BNBN).

It will also receive $10 million from Vulcan Venture and $6 million from a group of other investors including Millennium Technology Ventures, Highland Capital Partners and APV Technology Partners.

Barnes and shares were off 3/32 to 8 15/16. will receive $8.5 million from MightyWords as compensation for its expenses over the past six months, which it will use as operating capital. will retain a 23 percent ownership stake in MightyWords, while will assume a 30 percent stake.

Separately, named Dennis Capovilla as its new chief executive officer, succeeding founder Chris MacAskill, who will serve as CEO of MightyWords and become a director.

"With the clarity the MightyWords separation brings, we are able to focus all our resources, including the additional working capital, on growing our core business," Capovilla said in a prepared release. "Without the expenses associated with pursuing a start-up mass marketing opportunity, we'll be able to shorten our path to profitability."

Last quarter, beat the Street estimate, posting a loss of $10 million, or 79 cents a share, on sales of $11.9 million.

Its shares surged to a 52-week high of 42 1/4 in November before falling to a low of 4 1/8 in March.

Five of the six analysts following the stock maintain either a "buy" or "strong buy" recommendation.

First Call Corp. consensus expects it to lose 88 cents a share in the first quarter and $3.91 a share in the fiscal year.