Shakeout

{{For|the earthquake safety exercise|Great Southern California ShakeOut}} '''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.<ref name="Halton">{{cite web |last1=Halton |first1=Clay |title=Understanding Shakeouts: Stock Trading and Industry Trends Explained |url=http://www.investopedia.com/terms/s/shakeout.asp |website=Investopedia |access-date=July 25, 2007}}</ref><ref name="Scott">{{Cite book |last=Scott |first=David L. |title=Wall Street Words |publisher=Houghton Mifflin |date=1998 |isbn =0-395-43747-4 |url-access=registration |page=321 |url=https://archive.org/details/wallstreetwords00scot |accessdate=July 25, 2007}}</ref> When this happens, stronger companies use their capital reserves to acquire or eliminate weaker companies that have overextended themselves.<ref name="Halton"/> Large, diversified companies that are able to endure a weak business climate benefit from shakeouts.<ref name="Scott"/>

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

==References== {{Reflist}}

Category:Mergers and acquisitions