Groupon (GRPN) has quickly become a favorite of short-sellers.

There is strong demand to borrow the stock and bet against it, Bloomberg reports. Shorts like to sell borrowed stock, expecting to profit by buying the shares back when the price drops.

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Nearly 100% of the shares available to be lent out were shorted, according to Data Explorers. That amounts to 5.5% of Groupon's free-floating shares.

All this interest has made Groupon one of the most difficult and expensive stocks to short. The fees have risen 22% since its company's IPO this month, Bloomberg reports. Data Explorers ranks the stock a 10, which is the most expensive level on its charts.

What kind of fees are we talking about? It's unclear for Groupon, but CNBC reported in May that people were paying 40 cents a day to borrow a share of LinkedIn (LNKD), according to Seeking Alpha. That can add up fast.

"It's hard and very expensive to short (Groupon), because almost all the shares that can be borrowed are out on loan at the highest fee," a Data Explorers spokesman told Bloomberg.

So why all the short enthusiasm? There are just too many red flags with Groupon. The business model is questionable. The number of competitors is in the hundreds in the United States alone. Marketing costs are high, and the company's spending has been a concern.

The company has all the ingredients that should give investors pause. Perhaps that's why the stock didn't rocket sky high on its first day of trading. Shares were initially priced at $20 each and rose 31% on the first day. Since then, shares have fallen back to the $24 range.

"In the short run, it's a great trade," the founder of the IPO research firm IPOX Schuster told the Los Angeles Times. "In the long run, I don't want to hold it. There's great risk."