You can try. However, due to the precarious nature of the stock it would be hard to find anyone who will lend it to you. However, if you did find someone willing to lend you a portion, it would cost you almost 100% in fees: http://www.reuters.com/article/2011/11/15/us-groupon-shortse...
Note that if you'd bought the put option mentioned in the article you would have made a 4x return in 6 months. No borrowing needed.
But you wouldn't use the same amount of capital on an options trade. For example, if you're bankroll is $25,000, you might use it all to short the stock but it would be foolish to use it all to buy a put. It's more likely that you'd use a much smaller fraction of your stock purchasing unit size for options trading since the risk of losing 100% is higher.
you don't need to borrow the stock to short it. You could buy puts, sell calls, sell a CFD, spread bet...
No. Right now, with the bad news already coming out, the harm is increasingly priced into the stock price. The time to short was when they IPO'd and half of everyone saw this coming.
Normally I have a rule of "never short". Wish I'd broken it this time :-(.
It's always been virtually impossible to borrow the stock in order to short it; the float is small and the cost of borrow is extremely high.
Yeh, i was looking/playing the puts and it was traded very thinly as well, took ages to get bites so didn't try again after i did it once.
Why never short?
Because a short has a hard limit on the possible gain (the amount you got when selling minus the borrowing cost, if you can buy it back at zero when you have to return the stock), but no limit on possible losses (if there is a rally or a short squeeze and the price at which you have to buy it back is ten or hundred times of what you sold it for). This is especially nasty if your trade partner knows you have shorted 40% of the traded stock and he controls 61%: he can demand any price he wants for the 1% you must buy from him to fulfill your side of the trade. http://www.nytimes.com/2008/10/30/business/worldbusiness/30i...
It's already beaten down, but I expect more nastiness for the price when they announce their quarterly fiasco^H^H^H^H^H^Hresults and the IPO lockups expire, both within a few weeks mid-May to early-June.