What happened

Shares of online e-signature company DocuSign Inc. (NASDAQ:DOCU) plunged 10% in early trading Friday, before retracing to something closer to a 7.5% loss as of 2 p.m. EDT.

You can blame Wedbush for that.

Cartoon characters examine a stock chart falling through the floor

Wait. Wedbush only said "neutral?" So why is everyone selling? Image source: Getty Images.

So what

Early this morning, investment banker Wedbush initiated coverage of DocuSign stock with a neutral rating. That doesn't sound so bad, but here's the thing: Wedbush attached a $45 price target to its rating, and DocuSign stock closed above $46 yesterday. So not only does its analyst not see the stock going up over the next 12 months, but Wedbush actually expects the stock to decline in value -- a sentiment more ordinarily attached to sell ratings than to "neutral."

Now what

As the Wedbush analyst explains in a write-up covered on TheFly.com today, DocuSign boasts "impressive growth prospects." Regardless, Wedbush sees little "international success" for DocuSign so far, and worries that growth rates will decelerate heading into the back half of next year -- giving little reason to expect the stock price to appreciate in the near future.

Analysts are forecasting continued (if slimming) GAAP (generally accepted accounting principles) losses as far as the eye can see, and not so much as even a pro forma profit likely to appear before 2020. It's little wonder investors are reading between the lines today, and interpreting Wedbush's neutral rating as a "sell" in sheep's clothing.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends DocuSign. The Motley Fool has a disclosure policy.