As shares of social media company Snap Inc. (SNAP) hover below $10 — more than halving in value from highs in the days after the firm's initial public offering (IPO) in March 2017 — one bear on the Street warns that the worst is yet to come for SNAP investors. 

Snap Breaks Down Below Support

On Wednesday, analysts at BTIG burned Snap stock with a downgrade to sell and a new price target of just $5 per share. 

Ari Wald, head of technical analysis at Oppenheimer, echoed the bearish sentiment in an interview with CNBC on Wednesday, indicating that the stock's fall below a key level at $10.50 implies more pain ahead. 

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

The Venice, Calif.-based company has suffered through a brain drain over the past two years, losing its Chief Financial Officer (CFO) Drew Vollero, product chief Tom Conrad, Spectacles chief Mark Randall, sales chief Jeff Lucas, engineering chief Tim Sehn and ad tech chief Sriram Krishnan. Most recently, Chief Strategy Officer Imran Khan, who had held the title since 2014, announced he was stepping down. 

While Snap managed to beat second-quarter top and bottom line forecasts, daily active users fell 2% from the first quarter to 188 million, marking the firm's first sequential decline in DAUs. The report added to concerns already rampant on the Street regarding heightened competition in the social media space, notably from Facebook Inc.'s (FB) wildly popular Instagram platform. Instagram has copied many of Snapchat's features, such as a 24-hour disappearing "story" of photos and video with filters. The success of Instagram has brought in more than double the DAUs than Snapchat, according to BTIG. 

Not all are so bearish, however. Boris Schlossberg, managing director of FX Strategy of BK Asset Management, told CNBC that investors should be wary of shorting the stock since its disintegrating value could make it a potential takeout target by a company such as Alphabet Inc. (GOOGL).