Gildan Activewear Inc. saw its share price plummet more than 20% on Wednesday following accusations from a short seller regarding the company's growth strategies. The allegations, which question the apparel manufacturer's accounting practices and expansion claims, sent shockwaves through the market, erasing billions in market value.
Short Seller Report Triggers Selloff
The report, released by an unnamed short seller, alleges that Gildan's reported growth figures may be inflated and that the company's recent acquisitions have not yielded the promised returns. Investors reacted swiftly, dumping shares and driving the stock to its lowest point in over a year.
Gildan has yet to issue a formal response to the allegations, but analysts expect the company to address the claims in an upcoming investor call. The Montreal-based company, known for its T-shirts and apparel, has been expanding through acquisitions in recent years.
Market Impact
The sharp decline also dragged down other apparel stocks, as concerns about industry-wide accounting practices spread. The broader market remained relatively stable, but the Gildan selloff highlighted the impact of short seller activism on individual stocks.
Investors are now watching for any regulatory scrutiny or further disclosures from Gildan. The company's next earnings report is expected to provide clarity on its financial health and growth trajectory.
