Most of Groupon's float is being shorted.

Investors could short Groupon on Thursday.  Apparently 100% of the float of GRPN shares is now being shorted.

Even when a stock like GRPN is widely believed to be overvalued, shorting is still a very risky enterprise.  First, the cost of borrowing shares to short is no doubt very high.  At one point it cost 50% per year to borrow shares of Krispy Kreme (another overpriced IPO).   Second, just because you are short, there is no guarantee that you'll make money from your position.  Invariably you need a catalyst - such a missed earnings target or other such news to cause a price correction.  Finally I'd argue that we really don't know anything more about GRPN than we did when it went public and in effect the shorts are just sitting and waiting for the train wreck which may or may not happen.  They may be correct that GRPN is overvalued and they still may end up loosing their shirts.