Shakeout

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Shakeout is a term used in business and economics to describe the consolidation of an industry or sector, in which businesses are eliminated or acquired through competition. [1] [ failed verification ] It may also refer to a situation in which many investors exit their positions, often at a loss, due to uncertainty in the market or recent bad news circulating around a particular security or industry. [2]

Shakeouts can often occur after an industry has experienced a period of rapid growth in demand followed by overexpansion by manufacturers.[ citation needed ] Large, diversified companies are often most able to endure a weak business climate and can benefit from shakeouts.[ citation needed ] A shakeout of investors and internet businesses occurred during the dot-com bubble.[ citation needed ]

References

  1. ↑ Scott, David L. (1998). Wall Street Words . Houghton Mifflin. ISBN   0-395-43747-4.
  2. ↑ Investopedia Shakeout Retrieved on July 25, 2007
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