Oh Snap!

Shares of the Snapchat parent company tumbled 7 percent Wednesday, hitting a fresh all-time low after BTIG's Rich Greenfield downgraded it to sell and cut his price target cut to just $5 a share.

Snap's lack of innovation, coupled with the widely criticized redesign of its Snapchat application and low quality advertisements on the platform are a just a few of the reasons behind the downgrade. According to Ari Wald, head of technical analysis at Oppenheimer, the stock's recent fall below a key $10.50 level also suggests the pain has only begun.

"A month ago we were talking about the rally into resistance. Fast forward to today, and now we have a break down below support," Wald said Wednesday on CNBC's "Power Lunch." "Snap right here is the proverbial falling knife. We expect shares to get worse before they get better."

Snap shares have been on a free fall, down more than 66 percent since its highly anticipated market debut in March 2017 as competition for users in the social sphere heat up. Facebook's adoption of "Stories" — a popular 24-hour photo and video sharing feature — on its rival Instagram app now attract more than double the daily active users than that of Snapchat, according to BTIG.

Boris Schlossberg, managing director of FX Strategy at BK Asset Management, believes Snap's failure to keep up with Facebook puts it in danger of becoming the "next Myspace of social."

"Facebook has completely destroyed [Snap] with Instagram stories," he said. "The next big hit could be that the advertisers simply just move completely over to Instagram, where the max amount of audience is."

Despite Snap's failure to post gains, Schlossberg warns against shorting the stock because its disintegrating value could make it a potential takeout target.

"[Snap] could be a takeout candidate, for example for Alphabet, which could really use a backend into social, but otherwise it's really dead man walking and I do not want to own this stock," Schlossberg said.

Snap closed lower by 7 percent on Wednesday, at $9.20 per share. Its price was up slightly in Thursday's premarket.