Shares of Gildan Activewear Inc. slumped on Thursday after short‑seller Jehoshaphat Research released a negative report. The firm accused Gildan of inflating revenue figures, sparking a sell‑off that marked the steepest decline in more than six years. Investors reacted swiftly, pulling back from the apparel‑maker’s stock in the 10th minute of trading, and sent shares down.

The allegation centers on revenue recognition practices, a common pitfall for clothing manufacturers. Analysts noted that a single misstep could distort earnings forecasts and affect dividend payouts. Gildan’s market cap, hovering around $4 billion, makes the claim significant for shareholders and potential acquirers evaluating stability in assessing future growth prospects and determining investment thresholds.

Short sellers thrive when discrepancies surface, and Jehoshaphat’s report has already pressured other analysts to re‑evaluate Gildan’s financial statements. The stock’s rapid decline erodes market confidence and may trigger regulatory scrutiny. Competitors watch closely, as any lingering doubts could shift investor sentiment across the apparel sector and tighten market discipline for future earnings disclosures.

Gildan’s board will likely convene to address the claims and reassure stakeholders. Investors now face a choice: hold for a potential rebound or exit to avoid further volatility. The incident underscores the sensitivity of apparel stocks to revenue reporting and the power of short‑seller research in reshaping market perceptions overnight that can drive sharp price swings and reassess risk levels today.