Shakeout

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Shakeout is a term used in business and economics to describe two things:

A shakeout refers to a period in which rapid growth and overexpansion in an industry is followed by consolidation. [1] [2] When this happens, stronger companies use their capital reserves to acquire or eliminate weaker companies that have overextended themselves. [1] Large, diversified companies that are able to endure a weak business climate benefit from shakeouts. [2]

A shakeout refers to a situation in which many investors exit their positions, often at a loss, due to uncertainty or in the market, or recent bad news circulating around a particular security or industry. This type of shakeout is also known as a market selloff or market correction. [1] A shakeout of investors and internet businesses occurred during the dot-com bubble. [1]

References

  1. 1 2 3 4 Halton, Clay. "Understanding Shakeouts: Stock Trading and Industry Trends Explained". Investopedia . Retrieved July 25, 2007.
  2. 1 2 Scott, David L. (1998). Wall Street Words . Houghton Mifflin. p. 321. ISBN   0-395-43747-4 . Retrieved July 25, 2007.
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