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Last month, I recommended readers short a basket of social media and new technology stocks, including Twitter (NYSE:TWTR), Facebook (NASDAQ:FB) and Tesla Motors (NASDAQ:TSLA), among others. It proved to be the right call. Since that piece was published on April 11, those stocks are down 20.1%, 3.1% and 12.4%, respectively.

Twitter is now down 60% from its late 2013 high, and Facebook and Tesla are down 20% and 30%, respectively, from their recent highs. After stumbles like these, it's tempting to ask: Is the worst over?

If only it were. Even after the recent slides, none of these stocks are anywhere close to reasonably priced. Twitter and Facebook trade for 22 times sales and 17 times sales, respectively, and both are seeing moderation in the growth of their user bases. And Twitter, in particular, is one of the worst offenders in the world when it comes to stock based compensation. Even if the company were to get a viable revenue model overnight, its shareholders wouldn't benefit, as stock-based compensation is expected to come in at fully half of Twitter's 2014 revenues.

And let's not forget Tesla. Even after its recent slide, Tesla's market cap is over $20 billion… and this for a company that will be thrilled to sell 30,000 to 40,000 cars this year-or roughly what General Motors (NYSE:GM) sells in a weekend.

Still, after declines like these, I might expect to see a short-covering rally. So, I'm going to recommend you close out half of your short position for now. But leave the remaining half in place, because I expect the prices of all three to be significantly lower come year end. Stay short and play the collapse of tech bubble, part II.

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Source: Stay Short, My Friends